Canadian GDP shrinks unexpectedly in the first quarter of 2015

Canada’s gross domestic product shrank unexpectedly at the start of the year on the back of a sharp drop in business investment.

In terms of quarterly rates of change, GDP dropped by 0.7% in the first three months of the year to reach CAD$1.98trn although it registered an increase 1.4% versus the prior year, Canada's statistical office reported.

Companies’ investments in gross fixed capital formation fell at a quarterly pace of 1.6%, led by a 5% drop in outlays on non-residential structures.

On a sombre note, the wildfires raging out of control in northern Alberta could further cut into economic activity as the oil sands industry is forced to curtail its activities.

Current estimates are that about 10% of the country’s oil sands production has already been shut down a as result leading to an approximately 230,000 barrel per day reduction in output.

Energy extraction and support activities account for about 6% of Canada’s GDP, according to estimates from Bank of America-Merrill Lynch.