The Canadian economy officially slid into a "technical recession."
September 2, 2015
by The Canadian Press
OTTAWA — New figures from Statistics Canada show the economy contracted for two consecutive quarters in the first six months of 2015, which meets the technical definition of a recession.
Here are five things to know about the numbers:
An economic rebound could be underway: Even even though the economy declined at annual pace of 0.5% over the second quarter as a whole, it grew 0.5% in June, the final month of the quarter. The June increase was the first one-month spurt in real gross domestic product to hit 0.5% since it rose 0.63% in July 2013.
A large chunk of second-quarter gains came on the backs of households: The data shows that household consumption climbed 0.6% at a time when interest rates remained low. As a result, household savings dipped to 4% from 5.2% in the first quarter. Transport purchases – with help from 2.9% growth in vehicle purchases – were the biggest component with a 1.5 per cent increase.
The oil-price collapse delivered a big blow to economic growth: Natural resources, including mining, quarrying oil and gas extraction, contracted by 4.5% in the second quarter – for the second straight quarter. The decline was mostly tied to a 5.7% drop in the non-conventional oil extraction sector.
Exports creep up: The numbers reveal that exports edged upwards in the second quarter by 0.1% following two quarters of contraction. Goods exports gained by 0.2%, reversing a 0.5% decline in the first quarter. The export of motor vehicles and parts rose by 4.7%, while crude oil and crude bitumen climbed by 3.3%.
Business investment continued to struggle: Business investment in machinery and equipment fell 4.6% in the second quarter, while non-residential structures tumbled 2.3%t for a third consecutive quarterly decline. The drop was fuelled by lower investment in non-residential buildings, which was down 1.8%, as well as the 2.4% decline in engineering structures.
© 2015 The Canadian Press