Canada’s economy grew by 0.9% in the first three months of the year on the strength of investment and consumer spending, Statistics Canada reported today.

A jump in household spending, particularly on durable goods and housing, was behind most of the first-quarter advance, the federal government agency said.

The economy grew at an annualized rate of 3.8%, which topped the expectations of economists. Observers had been expecting annualized growth in the range of 2.9 to 3.0% for the January-to-March period.

“Consumers began 2006 much the same way they began 2005, by purchasing large amounts of durable and semi-durable goods,” Statistics Canada said.

Expenditure on clothing and footwear, furniture and furnishings, household appliances and recreational, sporting and camping equipment all climbed by well over 3%.

Service-producing industries surged ahead in the quarter as retail and wholesale trade, finance, insurance and real estate all advanced.

Meanwhile, production declined in the mining, utilities and non-durable manufacturing sectors. Canada’s overall industrial production fell 0.3%.