Canada's economy contracted for the first time this year in August. (Norm Betts/Bloomberg)
Canada's gross domestic product shrank for the first time in eight months in August, contracting 0.1 per cent as a small expansion in services wasn't enough to offset a drop-off in sectors that produce goods.
Statistics Canada said Friday that the oil and gas sector declined, as did manufacturing. Utilities expanded, as did the public sector, wholesale trade and the finance and insurance sectors.
"The good news, such as it is, is that the weakness was largely due to a pullback in oil & gas," BMO economist Doug Porter said of the numbers, "and the rest of the economy is still plugging ahead."
Canada's economy had expanded in each of the first six months of the year, before a flat showing in July and slight contraction in August. In both July and August, the weak performance was less than what economists had been expecting — and makes September's number even more important to see if the sudden weakness becomes a worrying trend.
"This means that the outlook for Canadian GDP in Q3 is mediocre," Scotiabank said. "Even a very strong bounce in September in the area of 0.5 per cent would only get GDP by industry up to 2 per cent," the bank said, speaking of the quarter as a whole.
"The Canadian economy pretty much took the summer off," Porter noted.