Canadian GDP grew by 0.3% in April but slowed to 0.1% in May, with mixed sector performances
Canadian economic growth rebounded in April but showed signs of slowing in May, according to The Canadian Press.
Statistics Canada reported on Friday that real gross domestic product (GDP) grew by 0.3 percent in April, consistent with its initial estimate for the month, after remaining essentially unchanged in March. Early indicators for May suggested the growth rate slowed to 0.1 percent.
BMO chief economist Doug Porter noted that growth in 2024 has been slightly better than expected but still generally lacklustre.
He stated, “For the Bank of Canada, this doesn't change much, as growth is still a bit below potential, which likely means some further backup in the unemployment rate and some further moderation in underlying inflation. As long as the latter holds true, more rate cuts are coming, eventually. We continue to look for the next move in September.”
The Bank of Canada cut its key interest rate target earlier this month for the first time since the early days of the pandemic. Another rate cut is anticipated, but the timing remains uncertain.
Statistics Canada reported that inflation increased to 2.9 percent in May from 2.7 percent in April, leading to reduced expectations for a rate cut in July.
In April, the economy saw growth in 15 of 20 sectors, with both goods-producing and services sectors showing positive results. Services-producing industries grew by 0.3 percent, led by a two percent increase in the wholesale trade industry.
Retail trade rose by 0.5 percent, the arts, entertainment, and recreation industry increased by 0.9 percent, accommodation and food services gained 1.2 percent, and the finance and insurance industry grew by 0.4 percent.
Goods-producing industries also grew by 0.3 percent, with mining, quarrying, and oil and gas extraction rising 1.8 percent. The manufacturing sector grew by 0.4 percent in April, while the construction industry declined by 0.4 percent.
