Gross domestic product fell at a 5.4 percent annualized rate in the January through March period, after a revised 3.7 percent drop in the previous quarter, Statistics Canada said today in Ottawa.
Canada’s businesses are reining in spending at the fastest pace since 1982 as U.S. demand plummets for goods such as cars and lumber, curbing export receipts. Companies cut back investment at an annual rate of 24 percent, led by fewer purchases of machinery and equipment, and they depleted inventories the most in 27 years.
The decline is the first back-to-back drop in quarterly output since 1991.
All goods-producing industries cut output in the first quarter, led by automakers and other manufacturers.
Consumer spending fell at an annual pace of 1.6 percent in the first quarter, down from a 3.1 percent drop in the fourth quarter.
Exports fell an annualized 30.4 percent in the first quarter, while imports fell 38 percent.
A C$16.1 billion reduction in inventories cut Canada’s first-quarter GDP by 1.1 percentage points, Statistics Canada said. Increased government spending helped offset the slowdown, adding 0.1 percentage points.
The economy shrank 0.3 percent in March, the agency said, in line with estimates of economists surveyed by Bloomberg News.