True to policy makers’ predictions earlier this year, the second quarter saw slower economic growth in Canada as the retail and manufacturing sectors plunged, according to this article from The Globe and Mail Wednesday.
Statistics Canada reports that the country’s GDP (Gross Domestic Product) stayed at $1.2 trillion in April, after seasonal adjustments. Several factors contributed to this lack of movement. With consumers making conscious efforts to spend less, April saw a 1.7-percent drop in retail trade, nearly canceling out the 1.9-percent increase posted the previous month. The factory sector fell for the first time in almost a year (it last went down in August 2009), and the only notable gains were in the mining and wholesale sectors.
The slowdown ends a seven-month period of fast growth for our country, the article also points out. Economists had predicted a modest growth of 0.2 percent per month following the 0.6 percent gain posted in March. The high domestic spending, fuelled by government tax incentives and stimulus projects, is starting to narrow now that the support has abated. As mortgage rates began to climb back up, real estate activity on many levels, including first and second mortgage numbers also declined, as reported in this Financial Post article.
On a year-over-year basis, GDP went up 3.3 percent, although signs indicate an even more sluggish economy in May. Just last week, Statistics Canada revealed that job growth fell from a robust 109,000 in April to just 24,700 in May.
