Is the recession over?
Gross domestic product sees first gain in a year in Q3, signals recession’s end
OTTAWA – Canada’s real gross domestic product grew 0.1 per cent in the third quarter, the first quarterly gain since the third quarter of 2008 and a signal – if a feeble one – that the recession has ended.
Statistics Canada reported Monday that the economy expanded at an annualized rate of 0.4 per cent in the third quarter, compared with a 2.8 per cent increase for the U.S. economy.
The first overall economic growth in a year marks an end to the recession, which is defined as at least two back-to-back quarters of contraction.
While it is the first indication Canada’s economy is again beginning to grow after begin battered alongside the rest of the world during the economic meltdown that saw the failure of U.S. banks, ravaged corporate profits and lengthened unemployment lines, it is “not exactly a clanging endorsement of the ‘end of recession’ story,” said Douglas Porter, Bank of Montreal’s deputy economist.
“While the quarterly gain for the third quarter was a bit of a damp squib, this doesn’t alter the bigger picture that the Canadian economy is erratically grinding out of recession, led by broad-based gains in domestic spending,” Porter wrote in a note to clients.
“With the solid hand-off from the sturdy September result and mounting signs that the U.S. recovery is taking root, look for much more convincing evidence that the recession is over in fourth-quarter GDP results. Still, the broader picture of a relatively muted recovery remains the dominant theme.”
The agency says final domestic demand advanced 1.2 per cent, as capital investment and personal expenditures both increased.
Real GDP was up 0.4 per cent in September, as most major industrial sectors increased their production.
Final domestic demand was bolstered by a second consecutive quarterly gain in personal expenditures and the first expansion in business capital expenditure since the fourth quarter of 2007.
Export and import volumes both increased after many quarters of decline.
The output of services-producing industries increased 0.6 per cent, with the wholesale and retail trade sectors and real-estate agents and brokers leading the way.
Goods-producing industries slipped 1.4 per cent, continuing a downward trend that started in the third quarter of 2007.
Mining and oil-and-gas extraction contributed the most to the decrease as a result of temporary shutdowns.
Source: THE CANADIAN PRESS, cp.org, Updated: November 30, 2009 9:20 AM
