02/28/2014 08:42 EST | Updated 04/30/2014 05:59 EDT

Canada's economy expands at 2.9% pace, beating forecasts

Canada's economy expanded an an annualized pace of 2.9 per cent in the last three months of 2013, Statistics Canada reported Friday.

That was better than the downward-revised pace of 2.4 per cent seen in the U.S. over the same period. It was also better than the 2.5 per cent growth rate that analysts had been expecting.

The gains were broad-based, as most industrial sectors showed expansion. Mining, oil and gas, manufacturing and the public sector all grew.

Loonie rises

For 2013 as a whole, the Canadian economy grew by two per cent.

That's about three-tenths of a percentage point higher than predicted by the Bank of Canada and the latest federal budget.

The strong figures were good news for the hard-hit Canadian dollar, which gained about a quarter of a cent after the data's release to trade at 90.15 cents US.

The year ended on a down note, however. Bitterly cold weather all month and a massive ice storm toward the end of December dragged the economy down, as factories, retailers and some government activities temporarily closed or operated at less-than-peak productivity. 

On a monthly basis, the Canadian economy shrank by 0.5 per cent in December. That's the worst monthly figure seen since the recession of 2008.

"Broadly speaking, the general message of a decent quarter ending on a soft note remains intact as weather … hit December figures negatively," Scotiabank economist Derek Holt said. "We expect December softness to result in deferred activity into … spring."