Canada's economy shrank 0.3 percent in August, partially erasing sharp gains in July, on weakness in the manufacturing, wholesale trade and energy sectors, Statistics Canada said on Friday. The downturn was slightly milder than the median forecast of a 0.4 percent contraction in a Reuters poll and was the weakest monthly performance since February.
Most economists had foreseen a retreat from the surprisingly strong 0.7 percent expansion in July, predicting anemic third-quarter growth. Year-on-year growth in August tumbled to 0.6 percent from 1.2 percent in July. The sectors driving the economy's surge in July were the same ones that backtracked sharply in August. Manufacturing, battered by the US housing collapse and slowing economy, slid 1.1 percent in the month after climbing 1.2 percent in July.
Wholesale trade retreated 3.1 percent on softness in the automotive and construction businesses, outweighing the 1.9 percent gain a month earlier. Output in the energy sector, which had jumped 2.7 percent in July, fell 0.5 percent in August due to declines in extraction and refinery production.
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