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May GDP Report Shows Canadian Economy Continues to Recover from Weak Start to Year

FOR IMMEDIATE RELEASE

The Conference Board of Canada

May GDP Report Shows Canadian Economy Continues to Recover from Weak Start to Year

Ottawa, July 31st, 2019—The Conference Board of Canada’s senior economist, Constantinos Bougas offers the following insights on today’s GDP release:

“The Canadian economy expanded by 0.2 per cent in May, the third straight month of solid growth. This is yet another sign that the economy continues to recover from a weak start to the year, and it aligns with our forecast that overall economic growth would strengthen in the second quarter. Today’s release also gives the Bank of Canada more reason to stay on the sidelines.”

Insights:

  • Real GDP grew by 0.2 per cent in May, the third consecutive month of solid growth. On a year-over-year basis, real GDP was up 1.4 per cent compared to May 2018.
  • Construction sector activity recorded its third consecutive monthly gain, with the gain entirely driven by the residential construction sector, as non-residential building activity edged down 0.1 per cent.
  • Manufacturing activity also posted healthy growth in May, thanks to a 2.3 per cent rise in durable manufacturing output. More specifically, motor vehicle production bounced back in May following temporary shutdowns in April.
  • With a 1.0 per cent expansion, transportation and warehousing led the way on the services side of the economy. The rail transportation segment was particularly strong.
  • On a negative note, declining activity in the wholesale trade sector subtracted the most from growth in May, but this followed strong back to back gains in March and April, so a decline was not surprising.
  • Following a strong 5.5 per cent output increase in April, the mining, quarrying, and oil and gas sector gave back some of those gains in May, with output falling by 0.8 per cent. The drop was driven by a 6 per cent fall in oil sands extraction activity, leaving overall oil and gas extraction down 2.5 per cent month-over-month.
  • Following three consecutive increases, retail sales declined by 0.1 per cent in May, leading to a 0.4 per cent contraction in retail trade output, its second consecutive decline.

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The Conference Board of Canada
Michelle Rozon corpcomm@conferenceboard.ca 613-526-3090 ext. 224


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corpcomm@conferenceboard.ca


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