Gross Domestic Product fell 0.2% in June, its first plunge into negative territory since the start of the year.
This decline was expected by most economists. It tracks the evolution of several other indicators already published, such as the drop in retail sales and the increase in the unemployment rate.
In June, the last month of the quarter, real gross domestic product fell 0.2%, after rising 0.2% in May. Activity in services-producing industries (-0.2%) and goods-producing industries (-0.4%) declined in June, led by declines in 12 of 20 industries.
During the second quarter, households reduced their spending, with growth slowing to 0.1% after rising 1.2% in the first quarter. “In the second quarter, the slight increase in spending on goods (0.1%) was mainly due to higher spending on new trucks, vans and sport utility vehicles (3.3%), reflecting improvements to past supply chain challenges,” says Statistics Canada.
Surprisingly, household disposable income rose 2.6% in the second quarter. This is a reversal from the decline seen in the previous quarter (-0.6%). Most of the increase in disposable income was due to increases in compensation of employees (2.2%) and income from non-farm self-employment (3.1%). These two components posted the largest increases since the first quarter of 2022.
Businesses continue to suffer. Revenues of non-financial corporations posted a fourth consecutive quarterly decline, continuing the downward trend that began in the third quarter of 2022. Revenues of energy-related industries continued to decline in the second quarter of 2023, a decrease in part attributable to planned maintenance work that affected operations. In addition, a sustained decline in energy prices (-6.0%) and energy export volume (-2.5%) also exerted downward pressure on the revenues of energy-related industries. ‘energy.
More details to come.
