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Canadian economy shrinks for the first time in 10 months

October 30th, 2017  |  Canadian Business

After 10 months of positive growth the Canadian GDP fell by 0.1% in August. According to Statistics Canada the decline is thanks in part to hits made to the manufacturing, mining, and oil industries.

While 12 out of the 20 sectors saw growth, the decline in the aforementioned industries was too significant to produce positive GDP growth. Manufacturing was down for the second month in a row, marking a 0.7% decline in August. Chemical manufacturing in particular had a hard month as it experienced its biggest one-month decline in the last 20 years. Oil and gas were down for the third month in a row, falling 0.8% in August.

"This was largely attributable to declines in convention oil and gas extraction resulting from maintenance shutdowns in Newfoundland and Labrador," said TD Bank economist Brian DePratto.

In reaction to fall in GDP, the Canadian dollar slipped by roughly half a cent, settling at 77.56 cents US.

"The run of amazing Canadian economic data is officially over, with growth coming back to reality in hurry," said Doug Porter, a Bank of Montreal economist.

On a more positive note, the service sector saw its 17th straight month of grow as it gained another 0.1% during the month of August.