The Canadian economy gained some momentum near the end of the fourth quarter of 2006, but the pace of economic activity slowed overall, Statistics Canada reported Friday.
Gross domestic product -- the figure used to measure the value of all goods and services produced in the nation -- slowed to 1.4 per cent annualized growth in the fourth quarter, a change of 0.4 per cent -- the slowest since mid-2003.
Growth in the U.S. economy edged up to 2.2 per cent in the same period.
The second- and third-quarter increases were 0.5 per cent, while the GDP increase in the first quarter of 2006 was 0.9 per cent.
Though the GDP rate was the most sluggish it has been since Canada's economy was struggling with the fallout from SARS and mad-cow disease, it still came in slightly above economists' expectations.
The economy grew at a rate of 2.7 per cent over the entire year, down from 2.9 per cent the previous year.
"Growth was largely driven by higher personal expenditure and the strengthening of exports. However, these gains were dampened by the draw-down of non-farm inventories," Statistics Canada reported.
At the end of the year, the pace of the economy appeared to pick up, with December's GDP rising 0.4 per cent due to consumer spending.
"There are some grounds for optimism in today's release, as all of the weakness was due to inventory cuts, while December's solid gain provides a decent hand-off for first-quarter growth," said Douglas Porter, deputy chief economist at Bank of Montreal, in a note.
Most growth in 2006 came from strong performances in the construction, retail and wholesale trade, as well as finance and insurance. However, manufacturing, forestry and logging all took a hit last year, StatsCan said.
StatsCan revised earlier estimates for the third quarter of 2006, bumping growth up to 2 per cent from an earlier estimate of 1.7 per cent.
