OTTAWA – Statistics Canada said the economy shrank by 0.1 per cent in August, the first decline in real gross domestic product since February.

Analysts had expected growth of about 0.2 per cent on a month-over-month basis.

The statistics agency said goods production declined 0.5 per cent in August, mainly due to decreases in mining, oil and gas extraction and manufacturing.

“It amazes me that we were talking about the risk of rate hikes in this current environment,” Scotiabank economist Derek Holt said.

There were also declines in utilities and construction, while the output of service industries was unchanged.

Increases in wholesale trade, transportation services and the public sector  were offset by declines in the output of real estate agents and brokers, retail trade and the finance and insurance sector.

The weak reading means that third-quarter economic growth likely slowed to half the pace of the second quarter, in keeping with the Bank of Canada’s recent downward revision to one per cent for the July to September period.