Household spending grew at a faster 0.9 percent in the first quarter of 2019, after increasing 0.2 percent in the previous quarter, amid broad based gains. Outlays on durable goods rebounded 1.2 percent in the first quarter, following a 0.5 percent decline in the fourth quarter of 2018. Vehicle purchases increased 0.9 percent, following a 0.8 percent decline. Similarly, household spending on audio-visual and information processing equipment rose 3.1 percent, following a 0.9 percent drop. Outlays on services rose 0.8 percent, led by life insurance and financial services (+2.1 percent).
Gross fixed capital formation rose 1.0 percent, rebounding from a 2.3 percent decline in the previous period. Overall business investment in non-residential structures and machinery and equipment rebounded 3.2 percent in the first quarter, following a 2.5 percent decline in the previous quarter. The strength was mainly attributable to an 8.7 percent rise in machinery and equipment investment, with increases in eight of the nine sub-categories. Significant investment was recorded in aircraft and other transportation equipment, corresponding to strong imports. Business investment in non-residential buildings rebounded 2.3 percent, following a decline of a similar magnitude in the fourth quarter of 2018. The increases in machinery and equipment and non-residential buildings were partly offset by declines in investment in engineering structures (-1.7 percent).
Housing investment fell 1.6 percent in the first quarter, the fifth consecutive quarterly contraction. Declines in new home construction (-3.6 percent) and ownership transfer costs (-3.2 percent) were slightly offset by increased renovation activity (+1.8 percent).
Exports declined 1.0 percent, the first decrease since the third quarter of 2017. A 0.9 percent rise in services exports moderated a 1.5 percent drop in goods exports. There were substantial volume declines in exports of farm and fishing products (-9.5 percent), and crude oil and crude bitumen (-2.8 percent). Exports of commercial services rose 1.3 percent, after a 1.6 percent increase in the fourth quarter of 2018.
Imports rose 1.9 percent in the first quarter, following a 0.2 percent drop in the fourth quarter. Aircraft, aircraft engines and aircraft parts (+38.6 percent), passenger cars and light trucks (+10.4 percent) and pharmaceuticals and medicinal products (+9.6 percent) were the main contributors to the increase. Imports of energy products were down 5.4 percent, largely because of lower crude oil and crude bitumen imports.