Canada’s economy grew 0.2 per cent in May, Statistics Canada said on Wednesday, in line with what economists were expecting.
The manufacturing sector drove growth in May for the second consecutive month, Statistics Canada said, while the mining, quarrying and oil and gas extracting sector contracted by 0.6 per cent. Wholesale trade fell to 0.8 per cent in May after a 1.4 per cent increase in April.
Pipeline transportation increased 0.6 per cent in May as the expanded Trans Mountain Pipeline began operations.
However, the retail sector was the largest drag on economic growth in May. Most retail sub-sectors were down, too, including purchases from food and beverage stores, health and personal care stores, and general merchandise stores.
The data agency is estimating that GDP in June grew a modest 0.1 per cent.
“The Canadian economy is feeling the pinch from higher interest rates, particularly impacting the retail sector,” wrote Andrew DiCapua, a senior economist at the Canadian Chamber of Commerce.
“Despite this, the resilience of key industries like manufacturing and pipeline transportation has lifted the second-quarter GDP estimate above the Bank of Canada’s forecast.”
DiCapua noted that the growth might be influenced by seasonal factors rather than a shift in economic momentum.
“With the bank noting downside risks to inflation, any uptick in economic activity is positive amidst broader challenges.”
Source Agencies
