Canadian Real GDP Increases 0.6% in Q4

On Friday, Statistics Canada (StatCan) reported that real gross domestic product (GDP) increased 0.6% on a quarterly basis in Q4, after increasing 0.5% in Q3.

Q4 growth was driven by higher household final consumption expenditures and increased exports and business investment. Drawdowns of business inventories and higher imports moderated the overall growth.

On a per capita basis, real GDP rose 0.2% in Q4, after declining 0.1% in the previous quarter. In 2024, GDP per capita fell 1.4%, following a decline of 1.3% in 2023.

Residential Construction

StatCan singled out residential construction as one of the highlights the GDP report.

Residential construction grew 3.9% in Q4, the largest quarterly increase since 2021Q1. All three components of residential construction were higher, with ownership transfer costs, which represent the resale market, leading the increase at 12.5%. New construction rose 2.2%, mainly due to increased work-put-in-place for single homes in Ontario, while alterations and improvements rose 1.5%. These increases coincided with a 1.3% increase in outstanding mortgages held by households—the strongest quarter of growth for the year.

Despite a robust investment to end the year, residential construction decreased 1.1% in 2024, on the heels of an 8.5% decrease in 2023. While ownership transfer costs increased 2.8%, this was offset by decreased spending on alterations and improvements, which were down 4.7%. New construction was little changed, up 0.1%, after falling in the previous two years.