Canadian economy takes 1Q setback

OTTAWA, May 30 (UPI) -- Canada's gross domestic product dropped 0.1 percent in the first quarter of 2008, the first quarterly decline since 2003, Statistics Canada reported Friday.

The federal agency in part attributed the decline to a particularly harsh winter, but also to widespread cutbacks in manufacturing, particularly for motor vehicles.

By comparison, StatsCan said the Canadian economy declined at an annualized rate of 0.3 percent in the first quarter, compared with 0.9 percent growth for the U.S. economy.

Exports of goods and services fell 1.1 percent in the first quarter. That's the third consecutive quarter, and is associated with the third consecutive decline in manufacturing output, the report said. Sales of forestry products abroad also dipped for a third consecutive quarter, which the agency attributed to continued weakness in the U.S. housing market.

"Declines in manufacturing, mining and some transportation industries were partially offset by increases in retail trade, accommodation services, and finance and insurance," the report said.