OTTAWA -- The Canadian economy suffered through its second consecutive below-par quarter at the end of 2012, setting the stage for another year of disappointing growth and job creation in 2013.
Statistics Canada reported Friday the economy squeezed out a mere 0.6 per cent advance in the last three months of last year -- following a 0.7 per cent increase in the third quarter -- and was on a downward path in the final month, when output retreated by 0.2 per cent.
The sickly production numbers were in line with economist expectations, but only because analysts had been hurriedly batting down their forecasts in the weeks before the report.
In reality, the final tally is still about half what the Bank of Canada had predicted in January, and about one-quarter what it had said was likely in October. Still, economists cautioned the results could have been worse, and expressed relief most of the weakness in the fourth quarter was due to a $10.3-billion inventory write-down, rather than from a consumption collapse.
"Obviously, the headline is pretty sour, but the details aren't terrible," said Doug Porter, deputy chief economist with BMO Capital Markets.
"There are actually are some slivers of good news. Things like consumer spending and business investment and even net exports were a little bit better than expected. It suggests the economy is still grinding ahead slowly but surely."
The markets also saw it that way. The Canadian dollar was down initially on the news but quickly recovered and was modestly up to 97.01 cents US by mid-morning.
For 2012 overall, growth in Canada came in at 1.8 per cent, down from 2.6 per cent in 2011 and the weakest number since the end of the 2008-09 recession.
Many analysts now believe 2013 will be even weaker, at between one per cent and 1.5 per cent, assuming there is no major shock.
The Statistics Canada report drew calls from left-wing commentators for more government intervention, but that didn't appear to sway Finance Minister Jim Flaherty.
"I think our results do reflect Canada's solid economic and fiscal fundamentals, but they also reflect the uncertainty that we see abroad and weakness in the global recovery," Flaherty said at a news conference Friday afternoon.
"What we can do in our country is, of course, control our own spending, which is what we're doing. We're working hard on the budget."
The budget, Flaherty added, won't contain any new "risky spending schemes" and the government remains on track to balance the budget by 2015.
-- The Canadian Press