2nd Quarter: 0.1% GDP Decline
CBJ – Canada’s economy expanded in June but it wasn’t enough to prevent the entire quarter from posting a negative number, and so Canada technically went into recession for the first half of 2015. The economy expanded by 0.5% in June, according to figures released by Statistics Canada, but the entire quarter was down 0.1%, and thus the dreaded R word.
The economy also shrank in the first quarter, which means Canada’s economy has met the bare minimum required before a recession is declared — two consecutive quarters of decline.
On an annualized basis, the economy shrank by 0.5% in the April-to-June period, after contracting at an 0.8% annual pace in the first three months of 2015. For comparison purposes, the U.S. economy expanded by 3.7% during the same period. However, compared with most any other nation, Canada more than held its own during the global oil crisis.
The service sector expanded by 0.6% in the second quarter, which helped offset a decline in goods-producing industries like oil and gas, and manufacturing.
While the resource sector continued to fall, shrinking by 4.5% in the quarter, other industries expanded, including the public sector, wholesale trade and real estate agents, where economic activity expanded by a whopping 9.9%.
Households also spent more during the quarter. Consumption increased 0.6% in the second quarter, following a 0.1% in the first quarter.