By Alexandre Deslongchamps Dec. 1 (Bloomberg) -- Canada’s economy grew faster than economists anticipated in the third quarter, and had a greater expansion from April through June than first estimated, as goods production expanded for the first time in five quarters. Gross domestic product expanded at a 1.3 percent annualized rate, the fastest in a year, to C$1.33 trillion ($1.07 trillion) after a revised 0.6 percent gain in the quarter before, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg said growth would be 1.1 percent, after an initially reported 0.3 percent expansion between April and June. The world’s eighth-biggest economy will expand at a 0.6 percent pace this year and next, the slowest since the last recession in 1991-92, the Bank of Canada said Oct. 23. Central bankers cited slower homebuilding and a slump in exports to the U.S., Canada’s main foreign market. Deputy Governor Pierre Duguay said Nov. 27 that policy makers will likely need to cut the benchmark interest rate again to boost economic growth. “Overall, not terrible numbers, but within them, signs of a negative quarter ahead as business will pare inventories in face of slowing demand,” Avery Shenfeld, an economist with CIBC World Markets, said in a note to clients. The Canadian dollar dropped 0.6 percent to C$1.2474 per U.S. dollar at 8:51 a.m. in Toronto from C$1.2399 on Nov. 28. One Canadian dollar buys 80.17 U.S. cents. Rate Decision Most economists in a Bloomberg survey conducted Nov. 6-12 said the bank will ease by a quarter of a point at its next meeting on Dec. 9. The benchmark rate hasn’t been below 2 percent since 1960 when it was based on treasury yields rather than policy moves. Government spending increased 0.1 percent in the third quarter from a 1 percent gain in the previous three months. Company profits expanded 5.7 percent, led by non-financial businesses. Growth in household expenditures slowed for a third straight three-month period to 0.2 percent, the weakest since the fourth quarter of 2003, as people bought fewer cars, Statistics Canada said. Exports fell 1.4 percent in the third quarter, the fifth straight decline, as weak U.S. demand pared shipments of cars, energy and agricultural products. Imports fell 1.6 percent. On a monthly basis, the economy grew 0.1 percent in September, slower than economists’ median prediction of 0.2 percent, after shrinking 0.5 percent in August. The economy’s rebound was led by wholesalers’ 1.6 percent gain and retailers’ 0.4 percent rise, the fifth in six months. Sawmills and oil producers declined. Cars, Lumber The economy will be crimped over the next year by sluggish shipments of cars and lumber to the U.S., and as lower prices for exported commodities such as oil and wheat erode revenue. Finance Minister Jim Flaherty reduced his economic growth projections for the next two years on Nov. 27, predicting an expansion of 0.6 percent this year and 0.3 percent in 2009. In his 2008 budget, released Feb. 26, he had predicted growth of 1.7 percent this year and 2.4 percent in 2009. To contact the reporters on this story: Alexandre Deslongchamps in Ottawa at adeslongcham@bloomberg.net.

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