"I think when the history books are written on this front we are likely to determine the recession began in earnest in Canada in October and then really gathered momentum in November," said BMO deputy chief economist Doug Porter of Statistics Canada's monthly GDP report due for release on Wednesday.

Porter said his bank's forecast is in line with the consensus estimate among economists who are looking for a 0.3% month-over-month decline in real GDP. Porter, however, warned that there is a risk the report will come in with a somewhat weaker result.

Wholesale sales and manufacturing shipments were down significantly in October and existing home sales fell by double digits, Porter said. Equity and commodity markets tumbled and mutual funds also saw large withdrawals in October, he said. On the positive side, employment in October was up and retail sales and housing starts were "not particularly weak," he said.

"So there were some slivers of strength," he said.

October will likely be the first of several negative months, Scotiabank economist Karen Cordes said. Scotiabank is forecasting three consecutive quarters of negative growth beginning in the closing months of 2008, she said.

Citing many of the same factors outlined by Porter, Cordes also pointed to a decline in hours worked in October. She said economists have already observed a buildup of excess supply in the economy.

"It's pretty bleak right now," she said, forecasting a 0.4% decline in real GDP in October compared to September.

Also calling for a 0.4% decline is CIBC economist Meny Grauman, who said "everyone is seeing the writing on the wall when it comes to the downturn."

"This may even be the worst quarter during this down cycle," he said, adding that November and December will likely bring even worse GDP results than October.

Grauman said government spending in 2009 should help to improve the economy, but he cautioned further trouble lies ahead for North America. "What's really troubling is the auto plant shutdowns that are going to be coming in the new year," he said. "This auto package announced by the government doesn't seem to be changing anything. The Big Three are still talking about shutting down plants."

By Sean McKibbon, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Sarah Sussman, This email address is being protected from spam bots, you need Javascript enabled to view it

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