GDP dropped in March; Statistics Canada cuts estimates for last three quarters

OTTAWA—The Canadian economy contracted in March for a second consecutive month as real gross domestic product grew at a slower-than-expected pace for the first three months of the year.

Statistics Canada says real gross domestic product rose at an annual pace of 2.4 per cent in the first quarter.

But it says the economy pulled back by 0.2 per cent in March, following a 0.1 per cent contraction in February.

The growth for the quarter was weaker than the 2.9 per cent pace economists had expected, according to Thomson Reuters.

The results came as Statistics Canada also lowered its estimate for January growth to 0.5 per cent compared with an earlier estimate of 0.6 per cent.

It also cut its estimates for growth in the last three quarters of 2015.

Based on the revisions, Statistics Canada now estimates that growth for last year came in at 1.1 per cent compared with its earlier reading of 1.2 per cent.

The weak end to the first quarter of this year and the lower revisions for last year come as economists raise concerns about the strength of the economy in the second three months of this year.

The Bank of Canada said last week that the fires that devastated parts of Fort McMurray, Alta., and forced the shutdown of several oilsands operations would shave 1.25 percentage points off real GDP growth in the second quarter.

The prediction implies the economy will contract in the second quarter.