Canada’s real gross domestic product rose 0.6% in the fourth quarter, following a 0.9% decline in the third quarter, Statistics Canada reported. Expressed at an annualized rate, real GDP rose 2.6% in the fourth quarter; in comparison, real GDP in the US rose at an annualized rate of 1.9% in the fourth quarter.

Household final consumption expenditure grew 0.6%, slightly slower than the 0.7% pace in previous quarter. Growth was driven by higher outlays on durable goods, up 2.0%, and financial services such as mutual funds and stock and bond commissions, up 1.6%. Investment in housing increased 1.2%.

The Conference Board of Canada reported the growth reflected a particularly weak first half of the year, but a solid performance in the second half of 2016, consistent with the view that the fallout from the commodity shock of two years ago is abating.

“The Canadian economy delivered solid, and above expected, growth in the final months of 2016,” said Craig Alexander, senior VP and chief economist at The Conference Board of Canada. “This is positive news and provides a good handoff to 2017. It sets the stage of healthy, but moderate, growth of slightly above 2% this year.”

However, Alexander noted that although the moderate growth beat expectations in the third quarter it also reflects several economic headwinds — including weak labor compensation despite strong job creation.

“While today’s numbers are quite positive, we remain cautious about the economic outlook,” he said.