Canadian Business Investment Falls 16%

Not good.

The latest Q2 GDP numbers are in.

As I reported earlier, GDP in Q2 is up 3.7%.

However, the underlying numbers are concerning, and there appears to be trouble ahead.

The most concerning number is the huge drop in Canadian business investment.

Business investment in Q2 fell a stunning 16% on an annualized basis.

That wiped out all Q1 gains, meaning business investment for the year is negative.

The big concern is that dropping business investment means people are looking to the future, and seeing reasons to cut back on investment, pointing to a serious drop in economic confidence.

In addition to the huge drop in business investment, household consumption is almost stagnant.

As a result, domestic demand – the key driver of economic growth in Canada – is now falling.

So, beyond the headline GDP number, Canada is facing some very serious economic problems, and the fall in business investment is a huge warning sign.

Spencer Fernando

Photo – YouTube