OTTAWA - Real gross domestic product grew at an annualized rate of 3.5 per cent in the third quarter after a second-quarter drop of 0.5.
Statistics Canada notes real GDP in the United States grew two per cent over the same period.
GDP advanced 0.9 per cent over the previous quarter as demand for exports increased.
On a monthly basis, real GDP by industry increased 0.2 per cent in September.
The agency reports consumer spending on goods and services rose 0.3 per cent in the third quarter, slightly below its second quarter gain of 0.5.
Government expenditures on goods and services grew 0.2 per cent.
Housing investment strengthened to 2.6 per cent, well above the second-quarter pace of 0.4.
However, business investment in plant and equipment fell 0.9 per cent, its first quarterly decline since 2009.
StatsCan says final domestic demand has been slowing throughout 2011 compared with 2010. On average, it has recorded quarterly growth of 0.5 per cent since the start of the year, down from the average quarterly growth of 1.1 over the same period of 2010.
Both the goods-producing industries (up 1.4 per cent) and the service industries (0.6) grew in the third quarter.
The energy sector led the way and notable increases also occurred in manufacturing, construction, wholesale trade and the transportation and warehousing sector.