Toronto—Canada’s economy may have been struggling over the first four months of 2015, but that does not prove it’s entered a recession, some of the country’s top economists on the C.D. Howe Institute’s Business Cycle Council, said.
“Data [does] not provide evidence that Canada had entered an economic downturn,” the influential group noted in a July 28 release.
The Business Cycle Council is the arbiter of business cycle dates in Canada and is comprised of eminent economists active in the field.
A flood of recent economic data has prompted numerous observers to claim the Canadian economy has slipped into a recession. Several major banks as well as the majority of Canadians – according to a recent survey – feel the Canadian economy has headed into the red.
Despite the negative signs, the Business Cycle Council does not share that opinion.
In defining a recession, the council looks for a pronounced, pervasive and persistent decline in aggregate economic activity. Through its review of recent data for output as measured by gross domestic product, for employment, and measures of sectoral activity, the council noted weak GDP data in the first four months of 2015, primarily associated with low oil prices and falling investment in the energy and some other resource sectors. It also noted resilience in labour markets, as reflected by employment data at the national level. It concluded that there is not enough evidence pointing toward a downturn at this time.
The council said it may review its position in the fall of 2015.