The economy of Canada slowed in the second quarter and actually contracted in June for the first time in six months, partly due to flooding in Alberta and a construction strike in Quebec, Statistics Canada (Statscan) reported Friday. Gross domestic product (GDP) grew at a 1.7 percent annual rate in the April-June quarter, slowing from 2.2 percent growth in the first quarter. The second-quarter figure was revised lower from an initial estimate of 2.5 percent. The weak performance was widely expected, and the actual growth figure was higher than economist predictions of 1.5 percent and a Bank of Canada forecast of 1 percent. In the month of June, GDP shrank 0.5 percent, in line with economist expectations. Consumers powered much of Canada's growth in the second quarter. The 0.9 percent increase in consumer spending was the strongest in nearly three years due to car purchases and higher insurance claims after massive flooding in oil-capital Calgary in late June. Government spending also contributed to the expansion, while business investment, net exports, and inventories slowed growth, Statscan said. Goods-producing industries performed poorly in the second quarter, decreasing by 0.5 percent on weakness in the mining and energy sector, manufacturing, and construction. But services expanded, led by retail and wholesale trade, finance, professional services, and real-estate services.
