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GDP grew at 0.4 per cent annual rate in Q2, Statistics Canada reports

GDP grew at 0.4 per cent annual rate in Q2

OTTAWA (CP) -- In a report that oozed gloom, Statistics Canada said Friday that second-quarter economic growth in Canada was the slowest since the third quarter of 1995.

The economy grew 0.1 per cent in the second quarter for an annualized rate of 0.4 per cent, the agency reported.

The growth in real gross domestic product was down from a revised annualized rate of two per cent in the first quarter, and down from 1.9 per cent a year earlier.

The agency also released a snapshot of how the economy performed in June alone in a survey of production at 210 manufacturing and service industries.

By that measure, the economy showed its largest monthly decline in more than a year as it receded 0.2 per cent in June, erasing a 0.3 per cent gain in May.

In its second-quarter report, the agency said GDP growth has averaged 0.5 per cent during the last four quarters, after averaging 1.2 per cent over the preceding four quarters.

Along with slower growth in incomes, consumer spending on goods and services, and investment in housing increased only marginally and slowed from the first quarter.

Consumer spending fell to 0.3 per cent growth in the second quarter.

Personal income also edged down, the first quarterly decline since 1996.

"Incomes were pulled down by a drop in federal transfers, in the wake of a $1.5-billion payout for the relief of heating expenses in the first quarter. Labour income slowed sharply to 0.5 per cent growth, following a two-year period of increases averaging more than one per cent," the agency said.

"Business investment rose 0.7 per cent, but businesses continued to reduce their expenditures on computers and other related equipment."

Business investment in inventories resumed, but at lower levels.

"Exports fell 0.8 per cent in the second quarter, following declines in the previous two quarters, marking the first occurrence of three consecutive declines since 1991."

"Corporation profits, stated on a nominal basis, fell 1.6 per cent, the first fall in three years," the agency said.

-- Rachel Gibson (rgibson@hotmail.com), August 31, 2001

Answers

Oh, mercy. Canada, too? Seems this coming - or is it? - recession is developing everywhere.

-- LillyLP (lillyLP@aol.com), September 01, 2001.

Now, here comes the spin. In fairness, the Cdn gov does have large coffers at the moment, but they don't plan to dive into them, they say.

CBC

Martin not expecting recession

The federal finance minister isn't worried. Paul Martin has dismissed fears of a recession, even though analysts are downgrading economic growth forecasts after a string of dismal reports this week. The economy is performing worse than the Bank of Canada had predicted, but Martin is confident things will get better. Statistics Canada says the economy was essentially flat between April and June.

-- Rachel Gibson (rgibson@hotmail.com), September 01, 2001.