Canada’s economic growth slows to 2% in the second quarter

31 August 2010 14:39  [Source: ICIS news]

TORONTO (ICIS)--Canada’s economy grew at a 2.0% annualised rate in the second quarter, down from a revised 5.8% annual rate in the first quarter, the country’s statistics office said on Tuesday.

This compared with a 1.6% second-quarter annual rate of increase in the US economy, said Statistics Canada.

Sequentially, Canada’s economy grew 0.5% in the 2010 second quarter from the first, after 1.4% growth in the first quarter from the 2009 fourth quarter, the agency said.

Second-quarter GDP growth was led by mining, notably oil and gas extraction.

Manufacturing also contributed to the gain, as did the banking sector and the public sector, the agency said.

Manufacturers' inventories increased for the first time since the fourth quarter of 2008. Inventories in both retail and wholesale trade also rose.

Declines in the home resale market and in retail and wholesale trade contributed to the slower growth in the second quarter.

Andrew Gretzinger, an economist with Toronto-based MFC Global Investment, said second-quarter growth was below the 2.3% annual rate his firm had expected.

"It's going to be a long slow path back to where we were in 2007," Gretzinger told Canadian business television.

The US economy, on which Canada's export-based producers depend, would not come "roaring back", he said, but he ruled out a double-dip recession.

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