Updated: Mon Aug. 31 2009 09:19:41
CTV.ca News Staff
New figures showing slight monthly growth in the Canadian economy have raised the possibility that the end to the months-long recession could finally be near.
Statistics Canada released figures Monday showing that the economy had grown 0.1 per cent in June, the first time that a monthly gain had been seen in Canada since July 2008.
The 0.1 per cent increase was about half the level of growth that had been expected by the private sector.
When adjusted for inflation, the GDP actually fell 0.9 per cent for the year's second quarter, from April to June. But the agency said that was an improvement over the 1.6 per cent drop in the quarter before that.
Corporate profits were down 11 per cent during the same period, marking the third straight quarter with a double-digit decline.
Other Statistics Canada data showed that consumer spending rose 0.4 per cent in the same quarter, in part because of improved auto sales.
Housing sales were also up, posting an 8.3 per cent increase in the national home resale market.
Exports of goods and services were down 5.2 per cent, which was better than the 8.7 per cent decrease seen in the first quarter of the year. The same trend was reported for business investment in equipment and machinery.
Personal income also saw a slight increase, edging up 0.9 per cent in the first quarter, while employment insurance benefits soared by 23 per cent.
What the numbers say
The new figures have prompted speculation from economists as to whether or not Canada has exited -- or may soon exit -- the recession it has been mired in since last year.
Millan Mulraine, an economics strategist with TD Securities, said the June numbers are indications that the Canadian economy has begun to stabilize, but the long-term figures are more important when evaluating the country's economic health.
"More importantly, I think it is the quarterly numbers that do show that there is some momentum building in the Canadian economy," he said when speaking to CTV News Channel in Toronto on Monday morning.
Other economists said that the recession appears to be in the rear-view mirror.
Douglas Porter, the deputy chief economist at the Bank of Montreal, said the June numbers suggest that the recession ended in the middle of the year.
He said the data paints a picture of an economy that suffered from the influence of weakness external economies -- and Porter also said that it remains to be seen how long the turnaround will last.
"The bigger issue is how robust and sustainable the recovery is. This could be a very halting recovery," he said.
Economist Krishen Rangasamy of CIBC World Markets said the country's recession "is finally over."
"The good news is that Canada's output has stopped contracting ... and with the auto plant restarts in July, coupled with inventory replenishments on both sides of the 49th parallel, Canada should see a big bounce in the third quarter (the current July-September period)."
Speaking at a news conference in Ottawa, Transport Minister John Baird discussed the progress of the stimulus-related projects that were initiated in the wake of the recession.
He said that the government's approach to the recession was working, but cautioned that a recovery in the near future was not certain.
"While we see light at the end of the tunnel, we're still in the middle of a global economic recession," Baird said Monday morning. "A potential recovery is still both tentative and fragile."
Baird said the government would stay the course on the economy while it is still recovering.
With files from The Canadian Press
