Market News
Canada's GDP shrinks in May, could avoid contraction in second quarter - REUTERS
Summary
- Economy shrinks 0.1% in May, likely expanded 0.1% in June
- May GDP falls due to output drop in retail trade, mining
- Q2 GDP likely to be 0.1% on an annualized basis, StatsCan says
- But Bank of Canada sees GDP contracting annualized 1.5% in Q2
OTTAWA, July 31 (Reuters) - Canada's Gross Domestic Product shrank 0.1% in May on a monthly basis as expected but is likely to regain the lost ground in June as some sectors rebound, data showed on Thursday.
An advanced estimate showed GDP is likely to have expanded by 0.1% in June, and on an annualized basis it could also post growth of 0.1% for the second quarter, Statistics Canada said.
That is in contrast to the more widely held expectation for a second-quarter contraction, and could change when the final June numbers are released next month.
In May, the biggest hit to growth came from the retail trade sector which contracted 1.2%, StatsCan said, adding that activity across seven subsectors out of 12 shrank.
Retail trade is part of the larger services-producing industries that contribute up to 75% of total GDP. Overall, output from the services-producing group was flat in May as the drop in retail trade was offset by real estate and transportation.
Amongst goods-producing industries, which account for 25% of GDP, the mining, quarrying, and oil and gas extraction sector was the main laggard with activity shrinking 1%
