Canadas economy shrinks for the second time in three months

first_img Twitter Bloomberg News Reddit ← Previous Next → January 31, 20199:13 AM EST Filed under News Economy More What you need to know about passing the family cottage to the next generation Output from the energy industry fell 0.6 per cent, Statistics Canada said. Lower production of petroleum and coal also drove a 0.5 per cent decline in manufacturing in November, the third drop in four months.Getty Images Canada’s economy contracted for the second time in three months on lower energy production, the clearest evidence yet of a soft patch that’s expected to linger through the first part of this year.Gross domestic product declined 0.1 per cent in November, Statistics Canada said Thursday from Ottawa, matching the median forecast in a Bloomberg survey of economists.Bank of Canada Governor Stephen Poloz signalled earlier this month he will take longer to add to his five interest-rate increases since the middle of 2017 because of signs of setbacks to growth. The weakness, even if temporary, illustrates risks to an economy that needs business spending to take over from consumers who are burdened by record debts. Is Canada headed for a recession? The numbers leave the Bank of Canada “decidedly on hold for the next couple of quarters,” Avery Shenfeld, chief economist at CIBC World Markets, said in a note to investors.The central bank predicts the annualized pace of growth will slow to 1.3 per cent in the fourth quarter of 2018 and again to 0.8 per cent in the first three months of this year. The economy is expected to rebound after that on strong job creation and business spending, with policy makers saying interest rates will still likely move higher over time.Output from the energy industry fell 0.6 per cent, Statistics Canada said. Lower production of petroleum and coal also drove a 0.5 per cent decline in manufacturing in November, the third drop in four months. Wholesaling fell by 1.1 per cent led by machinery and equipment, and construction fell for the sixth straight month to the lowest since the middle of 2017.Tumbling prices for Alberta oil late last year led the provincial government to impose production cuts that began in January. Alberta Premier Rachel Notley and Canadian Prime Minister Justin Trudeau are facing pressure before elections this year to develop stalled pipelines and send crude overseas rather than accept lower prices in the U.S. market.Retail spending remained weak in November, with a 0.3 per cent decline led by a 2 per cent drop in car sales. Retailing has declined by 1.2 per cent over the last year, the only major industry besides construction to shrink over that period.There was some evidence the weakness may not last. Transportation and warehousing was dragged down by a postal strike that ended around the end of the month, and Statistics Canada also said there were maintenance shutdowns at some auto assembly plants and offshore oil sites on the east coast after a storm.With assistance from Erik HertzbergBloomberg.com Canada’s economy shrinks for the second time in three months GDP numbers leave Bank of Canada ‘decidedly on hold for the next couple of quarters’, says economist Recommended For You’We were experiencing headwinds’ — Canopy Growth stock heads south on poor sales ramp-upDefining the future of Canadian competitiveness: How partnerships between industry and educational institutions can help lead the way forwardTrans Mountain construction work can go ahead as National Energy Board re-validates permitsDavid Rosenberg: Deflation is still the No. 1 threat to global economic stability — and central banks know itBank of Canada drops mortgage stress test rate for first time since 2016 Featured Stories 21 Comments Comment advertisement Join the conversation → Share this storyCanada’s economy shrinks for the second time in three months Tumblr Pinterest Google+ LinkedIn Sponsored By: Facebook Email Greg Quinn last_img

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