Canadian economy squeezed in August
03.11.2008 17:02
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- Source: cbc.ca
Canada's economy contracted by 0.3 per cent in August, a turnaround from the growth of 0.7 per cent seen in July, Statistics Canada said Friday. Wholesale trade, manufacturing, and the energy sector, which were the big contributors to the July increase, all retreated in August, the federal agency said. Some transportation industries, such as rail and truck transportation, were also affected by the downturn. Economists had been looking for an August decline in the range of 0.4 to 0.5 per cent. | Choppy Economic waves | | Month-to-month GDP change (%) | | March | -0.1 | | April | 0.4 | | May | -0.1 | | June | 0.0 | | July | 0.7 | | August | -0.3 | Source: Statistics Canada |
Statistics Canada said output in the energy sector fell by 0.5 per cent in August, following a 2.7 per cent rise in July. Petroleum and natural gas extraction both declined in August, and the pipeline transportation of natural gas dropped as well. Refinery output dipped by 4.5 per cent, partly as a result of production disruptions at two major plants. Wholesale trade dropped 3.1 per cent in August, rubbing out more than the gains of July. A decrease in the wholesaling of automotive products accounted for about three-quarters of the drop in August. "The decline in GDP in August dented July's strong gain and makes it likely that the economy expanded at a 1.5 per cent annual rate in the third quarter, somewhat slower than our earlier forecast for a 2.5 per cent increase," said RBC assistant chief economist Dawn Desjardins. "Even at this slower pace, we still think it is likely that the third quarter will mark the high-water mark for growth this year with financial market stress through the autumn keeping the cost of capital high and the U.S. economy likely having slipped into recession," Desjardins said. On Thursday, the U.S. Commerce Department said the U.S. economy contracted at an annual rate of 0.3 per cent in the third quarter, with some economists expecting more contraction in the fourth quarter of this year and the first quarter of next year. TD Bank economist Pascal Gauthier is looking for third-quarter annualized growth in Canada's economy of one per cent, with worse news to come. "We expect U.S. real GDP to record its worst performance in decades, retreating by around three per cent in Q4, with the Canadian economy mirroring this performance with a 2.5-3.0 per cent decline, the worst since 1991," Gauthier said. Both economists expect the Bank of Canada will lower borrowing costs again to spur the economy, with Desjardins predicting a one-quarter percentage point cut in December. RelatedInternal LinksIN DEPTH: The Bottom Line: Complete economic coverage from CBC NewsLoonie sinks as Bank of Canada cuts borrowing costs againU.S. economy contracts in Q3Consumer HeadlinesGoodbye to cellphone system access fees?The cellphone system access fee may be heading toward extinction with reports that Rogers Communications Inc. is relaunching its Fido discount brand without the hated charge.Conference Board cuts Canadian outlook for 2009The battering that global financial markets have taken in recent weeks has prompted one research group to cut its outlook for the Canadian economy for 2009. Ottawa plans to shake up duty-free shops: reportRadical reforms may be in store for Canada's duty-free shops, as Ottawa plans to strip away regulations and inject more competition into the lucrative sector.Sobering news for N.B. scotch connoisseursScotch connoisseurs in New Brunswick may need to find a new drink of choice to wash away the following bad news. Johnnie Walker, Bell's Extra Special and J&B Rare, along with eight single malt scotches, are being pulled off of New Brunswick liquor store shelves.CFIA expands Hershey's advisory beyond Toronto to other Ont. citiesHershey's chocolates and candies recalled two years ago over salmonella fears and subsequently stolen from a recycling depot are being sold in stores in Toronto and other Ontario cities, the Canadian Food Inspection Agency said Sunday. Consumer Life FeaturesMAPDriving and dialingCellphone bans and restrictions around the worldIN DEPTHE. coliFAQsSAFETYRecalls and AdvisoriesBLOGFood BytesUncorking history of alcoholVIDEOMoneyBartering makes a comeback (2:26)COMM-ODDITIESMoneyAs economy melts away, so does New York sculpturePeople who read this also read …
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