U.S. Crisis Spills into Canada

Macro Watch: Recent figures from Statistics of Canada show that the country is not immune to the crises experienced by its neighbor, the United States. Canada posted a second quarter annual growth of 1.6%. A decline compared to the 2.2% in the first quarter. Moreover, the unemployment rate inched up to 7.9% in July. Recent GDP figures show that the exports of goods and services slowed down to 0.73% from 5.7% the previous quarter. Nevertheless, domestic consumption remains strong. These figures show that the Canadian economy has not been invulnerable to the problems troubling its major trading partner. Canada has exported around USD 27 billion to the United States every month since January this year. These signs might be attributable not just to U.S. economic problems but also to the slow global economic recovery. However, it cannot be disregarded that the confidence of the country’s main consumer of goods and services abroad continues to decline while 9.1% of its workers are unemployed.

Canada’s Partnership with the U.S.

Chart provided by: CEIC Data

The Harper administration has already put together several job-creating measures for its 2011 budget, which might need to be extended to the next fiscal year. In addition, Canada has taken steps to decrease its trade dependence on the U.S. Canada’s government has already started negotiating bilateral trade agreements with the European Union and is trying to improve its trade relations with Brazil and China.
Discuss this post and many other topics in our LinkedIn Group (you must be a LinkedIn member to participate). Request a Free Trial Subscription.
By Michael Galope in Philippines – CEIC Analyst