Canada has entered what many consider to be a recession as the country deals with the consequences of a dive in oil and other commodity prices.
Statistics Canada on Tuesday reported a 0.5% decline in second-quarter GDP, following a downwardly revised 0.8% decline in the first quarter. A recession can be defined as consecutive negative quarters of growth, and Canada is the only of the Group of Seven industrialized countries in that territory. The U.S. grew 3.7% over the same time period, the Commerce Department reported last week.
While not everyone agrees Canada in recession — employment has not declined — it’s not a pretty picture.
“While not yet a recession, since employment hasn’t declined, Canada’s first half was about as weak as advertised, although the momentum registered in June is consistent with our view that the third quarter will provide a breather as the economy, at least for a quarter, returns to growth,” said Avery Shenfeld of CIBC World Markets.
Canada’s mining and oil sectors were to blame, with oil and gas extraction collapsing at an annual rate of 15.4%, and mining tumbling by 5.9%.