Canada officially sunk into a recession for the first eight months of 2015, according to second quarter gross domestic product (GDP) numbers released by Statistics Canada.
The minimum required for a recession to be legally defined is two quarters of economic decline, which Canada has now met after reporting losses for both the first and second quarters of this year. Real GDP fell 0.1 per cent between May and August this year and 0.5 per cent between January and April.
Statistics Canada reported the most significant economic factors included a decrease in business investment and a slowing national real estate market.
“Business gross fixed capital formation decreased 2.0%, the second consecutive quarterly decline. Lower business investment in non-residential structures and machinery and equipment (-3.1%) were the main contributors to the decline. Other factors contributing to the decrease included a 4.1% decline in new housing construction and a 33.2% drop in business outlays on mineral exploration and evaluation.”
The low Canadian dollar does not appear to have made the gains in Canada’s export industry as forecasters hoped. Exports of goods and services increased by only 0.1 per cent .
Salaries for workers also increased by only 0.1 per cent while household spending outpaced income growth with a 0.6 per cent increase. The household debt ratio also grew from 13.9 per cent in the first quarter to 14.07 per cent in the second quarter.
You can now expect to hear the ‘R’-word even more during the ongoing 42nd general election chatter.