Canadian Economy Halfway to Recession

Although the U.S. experienced a rise in real GDP Canada was not so lucky. From The Canadian Press:

Canada's economy shrank by 0.1 per cent in the first three months of this year - the first quarterly decline in real gross domestic product since the second quarter of 2003.

Statistics Canada said Friday the economy stalled "due to widespread cutbacks in manufacturing, most notably in motor vehicles."

The Canadian dollar skidded by about a penny immediately after the news, trading later in the morning at 100.43 cents US, down 0.67 cent from Thursday's close.

I cannot say that I am particularly surprised - I live in Southwestern Ontario, where it seems most companies sell more to the United States than they do domestically. A ~30% fall in the value of the U.S. dollar has evaporated margins for most Canadian exporters, which is showing up in the figures:

Exports of goods and services fell for the third straight quarter, in line with a third consecutive decline in manufacturing output.

The common definition of a recession is two consecutive quarters of falling real GDP. So Canada is halfway there.