The Canadian Statistics Agency said on Tuesday that the economy grew at an annual rate of 3.1 percent in the first quarter, supported by business investment and household spending.

The result was lower than the annual rate of 6.6 percent in the fourth quarter of 2021.

In the same context, the Canadian Statistics Agency said the change came with a 2.4 percent decrease in export volume for the quarter, after two consecutive quarterly increases.

Meanwhile, the agency said household spending rose by 0.8 percent in the first quarter, marking the third consecutive quarterly increase.

Spending on durable goods rose by 2.6 percent in the first quarter, supported by a 16.1 percent increase in spending on new cars and gains of 3.5 percent for new trucks, vans, and SUVs.

However, the Canadian Statistics Agency pointed out that despite the increases, spending on cars remained below pre-pandemic levels, as supply chain issues continued to hurt the automotive sector.

The housing construction rate rose by 4.3 percent, with renovation spending up 9.3 percent, resale costs increasing by 4.6 percent, and new construction rates rising by 0.2 percent.

Investment in business also rose in non-residential buildings by 2.9 percent and in machinery and equipment by 0.9 percent for the quarter, while spending on engineering buildings increased by 3.5 percent.

The Canadian Statistics Agency also said employee compensation rose by 3.8 percent. Excluding the third quarter of 2020, it was the largest quarterly increase since the second quarter of 1981.

The agency added in its report that significant wage growth was seen across the economy, including in professional and personal services, trade, manufacturing, healthcare, social assistance, and the construction sector.

In the same context, the overall growth for the first quarter came with a 0.7 percent economic growth in March.

The Canadian Statistics Agency added that its preliminary reading for April indicates the economy grew by 0.2 percent for the month, but warned that the figure will be revised when the official number is released on June 30.

On the other hand, this economic reading comes before tomorrow’s interest rate announcement from the Bank of Canada on Wednesday.

Economists expect the central bank to raise its key interest rate target by half a percentage point to 1.5 percent in an effort to slow inflation.

Edited by: Dima Abu Khair