The Canadian economy re -contracted in May, Statistics Canada said on Thursday, but in June, a reversal signs can see the growth hold flat for the quarter total.
The actual GDP fell 0.1 percent in May, matching the decline in April.
The agency stated that goods-producing areas were blamed for drop, especially in mining, mines and oil and gas extraction.
Manufacturing recorded an increase of 0.7 percent in the month, however, partially offset the decline of 1.8 percent in April when Tariff had a full impact from the United States. Statecan said that manufacturing activity was 1.1 percent lower in May in May compared to March.
Transport and warehousing also overturned from April decline.
BMO chief economist Dug Porter said in a note on Thursday, “The good news here is that the Canadian economy initially has a soldier through a period of maximum trade uncertainty with low loss.”
Statecan said that a busy month for rethinking of the house, especially in Toronto, saw activity in the real estate and rental industry.
Along with advancing three Canadian teams in the second round of NHL Playoffs, Statecan said that the audience was also growing in the game industry in May.
The public sector, meanwhile, saw a decline after a run-up of the activity related to the federal election in April.
Statecan’s initial estimate for June shows the expected rebound of 0.1 percent in the actual GDP. The agency pointed to increase growth in retail and wholesale trade, while manufacturing is expected to decline last month.
Together, Statecan said that its advance reading for the second quarter of the year suggests that the economy was inevitably flat. The initial estimates of the agency will be updated with the release of June GDP data next month.
Bank of Canada in its monetary policy report on Wednesday said that it was expected that the real GDP fell 1.5 percent on an annual basis in the second quarter, which is a considerable uncertainty amid uncertainty to American tariffs.
Porter stated that Statecan’s monthly GDP figures measure production by the industry, while Banks of Canada’s estimates would track the actual expenses in the economy.
He said, “The output and expenses do not always line up, especially when there is a major change in exports and imports, as certainly the case was in each of the last two quarters,” he wrote.
Porter stated that a sharp decline in Canada’s export versions tied up by American trade disruption would probably pull down the second quarter GDP based on expenses – the figures will be released in the late August.
CIBC senior economist Andrew Grantham also warned a lot of reading in the initial estimates of Statecan for the second quarter.
He said, “We will need to wait and look at the next month’s quarterly GDP release whether the economy is actually performing better than the bank’s expectations, and it could be implications to the possibility of cutting the future interest rate,” he said in a note.
The Canadian bank placed its policy rate at 2.75 per cent for the third consecutive time for the third consecutive time, which is called flexibility signs in the Canadian economy.
