The canadian economy contracted in the second quarter, being slightly below expectations, as exports posted their worst quarterly figure in more than seven years.
The gross domestic product of Canada, or the broad measure of goods and services produced in the economy, fell by 1.6% yoy in the second quarter to 1.78 trillion canadian dollars ($ 1.36 trillion), statistics Canada said Wednesday. Expectations were at the level of a 1.5% drop, according to economists Royal Bank of Canada.
The decline follows a revised growth of 2.5% in the first quarter, compared to the early estimate of expansion of 2.4%.
Data for June showed that Canada’s economy finished the second quarter on a strong note, as the production of energy that depend on the forest fires in Northern Alberta is gradually resumed. In the last month of the quarter, GDP rose 0.6%, offsetting an equivalent decrease in may, compared with expectations of increasing 0.4%.
Mining, quarrying, and oil and gas extraction, manufacturing and utilities were the main factors contributing to the increase for the month.
Output in the goods-producing sector in June increased by 1.6%. Mining, quarrying, and oil and gas extraction contributed the most to the increase, mainly due to the growth of unconventional oil production, the power gradually recovered after forest fire Fort McMurray and the evacuation in may. Manufacturing and utilities also rose, while construction and agriculture and forestry decreased.
Output in the service sector rose for the ninth straight month, rising 0.2% in June. The increase was placed in the public sector (education, health and governance), transportation and warehousing services, and financial and insurance sectors. Retail trade recorded the most significant decrease in production volumes.