Canada

Despite technical recession, household consumption supporting travel

OTTAWA — Canada’s economy recoiled for the second-straight quarter of 2015 — knocking the country backwards into a technical definition of recession, fresh Statistics Canada data revealed Tuesday.  However, household consumption remains buoyant, which could continue to support spending on leisure travel.

The federal agency said real gross domestic product contracted at an annual pace of 0.5 per cent in the second quarter of the year, which followed a revised decline of 0.8 per cent during the first three months of 2015.

Statistics Canada says the first-quarter performance was weaker than originally estimated, forcing the agency to lower its GDP reading for the first three months of the year from an original estimate of 0.6 per cent.

On the positive side, there was evidence to suggest Canada’s economy began to bounce back in June as GDP grew by 0.5 per cent for the month after shrinking over five straight months.

Drilling deeper into the second-quarter data, natural resources extraction contracted by 4.5 per cent.

A considerable amount of growth in the quarter was found in household consumption at a time when interest rates remained low.

Statistics Canada found that household consumption rose by 0.6 per cent in the second quarter, which followed a 0.1-per-cent gain in the first three months of the year. The second-quarter increase was led by 1.5-per-cent growth in transport prices.