Fall of crude prices puts Canada in recession
Canada is a big petroleum exporter, so the slump in crude prices, which is currently below $50 per barrel, has put the country into a recession for the first time in six years, according to CNN.
Official data Statistics Canada released shows second quarter gross domestic product (GDP) fell by 0.5 percent on an annual basis. Additionally, first quarter GDP dropped 0.8 percent, reports CNN, which puts Canada in a technical recession.
Slowed global growth and too much supply have slammed oil prices, which has had a detrimental effect on Canada’s already discounted heavy oil trades. Depressed crude prices and the uncertain outlook have forced companies to slash spending and delay projects across Canada’s oil sands industry.
Canada’s economy is experiencing troubles in other segments as well, such as the housing market.
CNN expects Canada’s troubles will have a negative effect on the United States because Canada is the biggest U.S. export market and accounts for about 20 percent of U.S. exports.
“[The] outlook for the Canadian economy suggests that it poses a significant downside risk to the U.S. growth outlook,” says Bricklin Dwyer, BNP Paribas economist.
Bricklin says the situation in Canada is expected to improve. However, he says there is still a risk of bigger shock to U.S. exports.
About the Author: Allison Kral
Allison Kral is the former senior digital media manager for North Coast Media (NCM). She completed her undergraduate degree at Ohio University where she received a Bachelor of Science in magazine journalism from the E.W. Scripps School of Journalism. She works across a number of digital platforms, which include creating e-newsletters, writing articles and posting across social media sites. She also creates content for NCM's Portable Plants magazine, GPS World magazine and Geospatial Solutions. Her understanding of the ever-changing digital media world allows her to quickly grasp what a target audience desires and create content that is appealing and relevant for any client across any platform.Subscribe to Pit & Quarry
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