{"id":156416,"date":"2025-11-01T03:19:06","date_gmt":"2025-11-01T03:19:06","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/156416\/"},"modified":"2025-11-01T03:19:06","modified_gmt":"2025-11-01T03:19:06","slug":"canadas-gdp-contracts-in-august-might-avoid-a-recession-in-third-quarter","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/156416\/","title":{"rendered":"Canada&#8217;s GDP contracts in August, might avoid a recession in third quarter"},"content":{"rendered":"<ul data-testid=\"Summary\" class=\"summary-module__summary__QjADA\">\n<li data-testid=\"Body\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf summary-module__point__UgXPz\">August GDP drops by 0.3%, September growth likely to be 0.1%<\/li>\n<li data-testid=\"Body\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf summary-module__point__UgXPz\">Both services and goods sectors contracted, StatsCan said<\/li>\n<li data-testid=\"Body\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf summary-module__point__UgXPz\">Annualized Q3 growth likely 0.4%, following 1.6% drop in Q2<\/li>\n<\/ul>\n<p>OTTAWA, Oct 31 (Reuters) &#8211; Canada&#8217;s GDP contracted in August against a consensus estimate of flat growth, data showed on Friday, and an advance estimate suggested the economy might escape a recession in the third quarter.<\/p>\n<p>The economy shrank by 0.3% in August following upwardly revised growth of 0.3% in the prior month, Statistics Canada said, effectively nullifying any growth so far in the current quarter.<\/p>\n<p data-testid=\"promo-box\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf article-body-module__promo-box__hVl8h\"> Sign up  <a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/world\/americas\/canadas-gdp-contracts-august-might-avoid-recession-third-quarter-2025-10-31\/undefined?location=article-paragraph&amp;redirectUrl=%2Fworld%2Famericas%2Fcanadas-gdp-contracts-august-might-avoid-recession-third-quarter-2025-10-31%2F\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" rel=\"nofollow noopener\" target=\"_blank\">here.<\/a><\/p>\n<p>This was the fourth monthly contraction in five months and was led by a drop in growth in both the services and goods sectors.<\/p>\n<p>An advance indicator suggested that the monthly GDP would likely expand by 0.1% in September, taking the total annualized growth of the third quarter to 0.4%.<\/p>\n<p>The advance estimate is not always accurate and could change. The annualized quarterly estimate is based on industrial output data while StatsCan will publish the annualized quarterly GDP based on income and expenditure.<\/p>\n<p>A likely growth in GDP in the third quarter, which hinges on the economy boosting its output in September, means Canada could avoid slipping into recession.<\/p>\n<p>Two quarterly contractions in a row are considered to constitute a recession.<\/p>\n<p>Canada&#8217;s GDP had shrunk in the second quarter by 1.6% as the impact of tariffs and general trade uncertainty reduced exports and hurt growth.<\/p>\n<p>Canada&#8217;s GDP contracts by 0.3% in August following a similar gain in July<\/p>\n<p>&#8220;Canada&#8217;s economy is on the precipice of a recession,&#8221; said Michael Davenport, Senior Economist at Oxford Economics, adding he expected the economy to struggle in the near term.<\/p>\n<p>Some economists hope that next week&#8217;s federal budget could help in boosting spending and demand and help to grow the economy.<\/p>\n<p>The Canadian dollar weakened further after the data and was trading down 0.27% at 1.4022 to the U.S. dollar, or 71.32 U.S. cents. Yields on two-year government bonds dropped by 1.5 basis points to 2.397%.<\/p>\n<p>The manufacturing sector, which is the hardest hit due to U.S. tariffs and accounts for almost a tenth of the GDP, contracted by 0.5% in August, data showed.<\/p>\n<p>The biggest drop, however, was seen in mining, quarrying and oil and gas extraction, which contracted by 0.7%, primarily due to a 1.2% drop in metal ore mining and a 5% drop in coal mining.<\/p>\n<p>Within the services sector, the main contractions were seen in transportation and warehousing, in part because of an airline strike, as well as wholesale trade.<\/p>\n<p>However, growth in retail trade and real estate and rental and leasing helped offset some of the drop in the sector.<\/p>\n<p data-testid=\"SignOff\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__extra_small__8Buss body-module__full_width__kCIGb body-module__extra_small_body__Bfz20 sign-off-module__text__LQAMP\">Reporting by Promit Mukherjee; Editing by Dale Smith, Andrea Ricci and Franklin Paul<\/p>\n<p data-testid=\"Body\" dir=\"ltr\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf article-body-module__element__5eCce article-body-module__trust-badge__5mS3f\">Our Standards: <a data-testid=\"Link\" target=\"_blank\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.thomsonreuters.com\/en\/about-us\/trust-principles.html\" rel=\"noopener nofollow\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__medium__2Rl30 text-module__small__sph8i link-module__link__INqxZ link-module__underline_default__-okuC link-module__with-icon__qlg76\">The Thomson Reuters Trust Principles., opens new tab<\/a><\/p>\n<p><a href=\"https:\/\/www.reutersagency.com\/en\/licensereuterscontent\/?utm_medium=rcom-article-media&amp;utm_campaign=rcom-rcp-lead\" target=\"_blank\" dir=\"ltr\" class=\"button-module__link__A3sD0 button-module__secondary__70gBu button-module__round__QDFgq button-module__w_auto__Sem-F\" data-testid=\"LicenceContentButton\" rel=\"nofollow noopener\">Purchase Licensing Rights<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"August GDP drops by 0.3%, September growth likely to be 0.1% Both services and goods sectors contracted, StatsCan&hellip;\n","protected":false},"author":2,"featured_media":156417,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[174],"tags":[82566,82519,79,38368,91304,84370,1802,84149,82530,91305,83399,84146,83115,83116,179,84148,18,14530,87582,9207,19,84368,84369,17,83122,84449,87207,82565,82524,82507,85212,83002,84142,91306,82534,82563,91303,82533],"class_list":{"0":"post-156416","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-agri","9":"tag-amers","10":"tag-business","11":"tag-ca","12":"tag-ca-gdp","13":"tag-cen","14":"tag-com","15":"tag-destef-markets-macromatters","16":"tag-destocabsm","17":"tag-destocadnm","18":"tag-destocatpm","19":"tag-destortao","20":"tag-eci","21":"tag-eco","22":"tag-economy","23":"tag-efmarkets-macromatters","24":"tag-eire","25":"tag-forest","26":"tag-frx","27":"tag-gdp","28":"tag-ie","29":"tag-int","30":"tag-ipr","31":"tag-ireland","32":"tag-mce","33":"tag-min","34":"tag-mtgfx","35":"tag-mtpix","36":"tag-namer","37":"tag-news1","38":"tag-plcy","39":"tag-pxp","40":"tag-rep","41":"tag-tmbr","42":"tag-topcmb","43":"tag-topicmarkets-commodities-agriculture","44":"tag-topicworld-canada","45":"tag-topnws"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/115472286616940633","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/156416","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=156416"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/156416\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/156417"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=156416"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=156416"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=156416"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}