Canadian Economy Registers 0.2 Percent Contraction In February

April 30, 2008 11:36 a.m. EST

Ottawa, Canada (AHN) - Instead of an expected 0.2 percent growth rate, Canada's economy had an unexpected 0.2 percent contraction in February, according to Statistics Canada.

The slight shrinkage was due to dips in wholesale trade and manufacturing, although there were also slowdowns in retail trade, oil and gas extraction, transportation and the finance sectors.

The February slump contrasts with January's 0.6 percent gross domestic product growth, although a slight improvement from December's 0.7 decline.

According to Statistics Canada, quoted by the Globe and Mail, the rise in tourism, government and construction sectors' performance was not sufficient to offset suffered by the six sectors.

Wholesale, particularly car sales and building supplies, registered the largest decline at 1.4 percent, while manufacturing decreased by 0.7 percent.

An indicator of the effect of the international credit crunch on the Canadian economy is the 0.2 percent slip in the country's finance and insurance sectors as transaction volumes on the stock exchange plummeted.

Statistics Canada released also on Wednesday the 2007 data, which said Canadian manufacturers had a mixed year, employment went down by 55,300 jobs and total hours worked dipped by 2.9 percent.