Canadian Real gross domestic product (GDP) grew 4.5 per cent in May, following two months of unprecedented declines when emergency measures to slow the spread of COVID-19 resulted in widespread shutdowns, reported Statistics Canada on Friday.
“In May, provinces and territories started reopening sectors of their economies to varying degrees. While May’s gains offset some of the March and April declines, economic activity remained 15 per cent below February’s pre-pandemic level,” said the federal agency.
“Both goods-producing (+8.0 per cent) and services-producing industries (+3.4 per cent) were up, as 17 of 20 industrial sectors posted increases in May.”
Stats Can said mining, quarrying, and oil and gas extraction increased 2.4 per cent in May primarily as a result of increased metal ore mining. Oil and gas extraction (-2.7 per cent) decreased for the fourth time in five months as conventional crude oil production fell to its lowest level since December 2016, while natural gas extraction increased. Support activities for mining, and oil and gas extraction declined 5.9 per cent, mainly because of lower drilling and rigging services, it said.
“Canada’s economy launched into its return from the abyss in May and the recovery picked up even more steam in June,” said Royce Mendes, an economist with CIBC Economics.
That said, early indications suggest second quarter GDP still averaged roughly 12 per cent (not annualized) lower than the first quarter, representing the largest drawdown on record by a long shot. While such a decline was expected, it was worse than the what was seen earlier in the week in the US for the same quarter, as Canada enacted restrictions earlier and eased them less aggressively. The good news is that the cautiousness has kept virus cases under control north of the border, suggesting Canada’s economy is in a position to outperform that of the US in Q3.”
More to come