Analysts are suddenly warning that Canada’s economy could contract in the first quarter of the year.
If that does happen, it would mark the first really big quarterly hit since the economy basically flatlined in the second quarter of 2011 and, before that, contracted in the Great Recession.
And whether it’s above the zero mark or a shade below, it’s shaping up to be a poor showing, regardless.
Forecasters have been cutting their outlook for economic growth in Canada this year amid the sustained slump in crude prices, and the latest economic readings drive home their concerns.
This certainly doesn’t bode well for unemployment, which at 6.8% is high, and rising, as jobless rates spike in the oil-producing regions.
And Canadians will see all this play out in the Alberta and federal budgets – the oil-rich province unveils its fiscal projections Thursday, and the Canadian government at a later date – and no doubt in the election campaigns that loom.
Canada’s economy expanded in the fourth quarter of last year at an annual pace of 2.4%, and in December by 0.3%
There’s just over a week to go in the current first quarter, and a couple of weeks until Statistics Canada reports on how the economy fared in January alone.
January may well show a contraction in the area of 0.1% to 0.3%, economists now believe, having seen a series of weak indicators from the factory floor to the shopping mall.
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