Canada’s Economy Shrank In 1st Qtr.

Reuters reports that Canada’s economy shrank in the first quarter at the fastest pace since 1991, pushing the country into its sharpest two-quarter downturn on record, Statistics Canada (Statscan) data showed. Real gross domestic product contracted 5.4%, annualized, in the first quarter of this year, better than the 6.6% drop expected by analysts. That follows a fourth-quarter drop of 3.7%.

The back-to-back quarterly decline was the largest since Statscan began collecting the data in 1961. Business investment in plants and equipment plummeted 11% in the first quarter, hurting both exports and imports. Consumer spending also continued to decline. Manufacturing, dominated by the troubled auto sector, scaled back production significantly.

Compared with the fourth quarter, the economy contracted 1.4% in the first quarter and compared with the first quarter of 2008, it was 2.1% smaller, Statscan said.