The Canadian economy turned in its weakest quarter since the Great Recession in the second quarter, as Alberta’s wildfires and slumping exports took a big bite out of the country’s economic output.
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According to Thomson Reuters, economists have predicted that the economy contracted at an annualized pace of 1.5 per cent in the second quarter.
“It wasn’t pretty, but it wasn’t expected to be, ” Avery Shenfeld of CIBC Capital Markets said in a research note.
Manufacturing output also recovered with a 1.8% gain following a 2.5% decline the previous month to give an annual increase of 0.9%, but construction output fell again for the month and recorded a 3.3% annual contraction.
The central bank estimated that the halt in oil production and evacuation of the Fort McMurray region cut 1.1 percentage points of growth off the second quarter.
Energy exports fell 7.5 per cent while exports of motor vehicles and parts dropped 5.8 per cent due to lower exports of passenger cars and light trucks.
Exports of aircraft and other transportation equipment and parts were up 5.6 per cent.
However, the decline is expected to be short-lived and economists predict that the economy grew by 0.4 per cent in June.
Exports were also down from April to June.
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On a quarterly basis, real gross domestic decreased 0.4 percent in the second quarter, after increasing 0.6 percent in the first quarter.
