Following three quarters of post-pandemic expansion, the Canadian economy shrank by 11 per cent between April and June, according to Statistics Canada.
Large declines in home resale activities (-17.7 per cent) and exports (-4 per cent) pushed real gross domestic product down 0.3 per cent in the quarter. While business investment in machinery and equipment rose 5.7 per cent thanks to a sharp increase in investment in aircraft, and investment in business inventories also rose, these and other positives weren’t enough to offset the declines. Imports were flat for the quarter.
Businesses accumulated $9.7 billion in inventories in the second quarter, compared with a $6.2 billion withdrawal in the first quarter.
StatsCan reports that international supply chain disruptions continued to impact the automotive industry, with the resulting longer plant shutdowns constraining parts imports and causing a large drop in exports.
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