The Canadian economy grew for a third consecutive month in May, rising 0.2 per cent overall as 13 of 20 sectors advanced, Statistics Canada reported Wednesday.
The growth in gross domestic product was above analyst estimates of 0.1 per cent growth and showed renewed strength in manufacturing, which rebounded from an April dip, as well as continued growth in construction.
Douglas Porter, chief economist at BMO Capital Markets, said May’s growth was slightly more positive than the month’s numbers indicate because Statistics Canada also revised April’s number to 0.33 per cent growth from 0.26 per cent.
“The above-expected GDP gain is all the more impressive since it overcame declines in each of wholesale, retail, utilities, and oil and gas output (oilsands production pulled back six per cent from April),” Porter wrote in a commentary.
He said the slight upward revision to April and the “sturdy” details in May put a “relatively healthier glow on the economy’s spring-time performance.”
TD senior economist Brian DePratto said the May report underscores the strength of a recovery from a weak start to 2019, but noted that manufacturing and real estate were “coming back to life after earlier setbacks.”
“That said, a recovery is a recovery, and with upward revisions to the April report, we upgrade our second quarter GDP growth tracking again, to 3.0 per cent annualized,” DePratto wrote.
Porter agreed that growth for the second quarter will be close to three per cent.
“That compares with (BMO’s) call of 2.5 per cent, and the (Bank of Canada’s) latest official estimate of 2.3 per cent for the quarter,” Porter wrote.
Statistics Canada’s GDP report said wholesale trade fell 1.4 per cent in May, after four months of growth, with all subsectors contracting except building material and supplies (up 0.4 per cent).
Retail trade contracted 0.4 in May, the first month-over-month decline since last summer, while the mining, quarrying and oil-gas extraction sector contracted 0.8 per cent after a 5.5 per cent increase in April.
Oil and gas extraction decreased 2.5 per cent in May, after two months of growth. Excluding oilsands, crude petroleum and natural gas extraction rose 1.1 per cent.
Mining, excluding oil and gas extraction, was up for a third consecutive month with a gain of 2.7 per cent.
Metal ore mining was up 2.6 per cent, non-metallic mining was up 2.1 per cent, led by an export-driven gain in potash (up 3.0 per cent). Coal mining was up 8.3 per cent on higher exports of metallurgical coal, Statistics Canada said.
