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Shoppers can’t outspend negative effects of oil shock, economy stalls

A slowdown in the oil and gas sector helped bring economic growth to a halt in February. Credit/Getty Images

Statistics Canada said Thursday the country’s economy posted no growth in February, as output from the manufacturing and energy sectors declined.

The retail sector advanced in the month, as consumers spent more at stores, the federal statistics agency said. But the gain was offset by declines in other industries.

“There were notable increases at general merchandise stores, food and beverage stores, sporting goods and hobby, book and music stores as well as at motor vehicles and parts dealers,” Statscan said.

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But Statscan said there were “notable declines” in manufacturing as well as oil and gas extraction activities. The construction, wholesale and transportation sectors also contracted.

It was the second consecutive month of flat to negative growth for the Canadian economy, suggesting the impact from the deep slide in oil prices has begun to take hold though consumers continued to spend, propping up the economy in the process.

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