The Canadian economy seems to have stumbled in the second quarter with continued declines in housing investment, especially with new construction decreasing.

Data from the GDP index released by Statistics Canada today, Friday, revealed that the economic growth index in Canada recorded a contraction of 0.2% in June, in line with market expectations which indicated a contraction of the index by 0.2% during the same period, after the Canadian economy grew by about 0.3% in May; it was revised to 0.2%.

It is worth noting that the GDP index in Canada measures the change in the value of goods and services adjusted for inflation on a monthly basis. This is the primary and broadest measure of economic activity.

Statistics Canada reports that the economy contracted at an annualized rate of 0.2 percent in the second quarter.

The agency also adjusted its reading of first-quarter growth to an annualized pace of 2.6 percent, down from 3.1 percent.

The decline in the second quarter came with a decrease in investment in the housing sector by 2.1 percent, marking its fifth consecutive quarterly decline.

New construction fell by 8.2 percent in this quarter, while spending on renovations also declined by 4.3 percent.

This report comes ahead of the Bank of Canada’s interest rate decision scheduled for next week.

Traders are looking forward to an improvement in the stock market and thus the pace of the economy, as a recovery in business activity means increased corporate profits.

Additionally, bond traders are heavily influenced by inflation and improvements in economic activity.

This improvement may lead to rising inflation. By monitoring its data, investors can gauge market movements and their financial portfolios.

The positive economic growth data supports the Canadian dollar, and vice versa.