Canada: Monthly GDP growth blows past expectations on higher oil and gas output in May
July 28, 2017
After easing in April, the pace of economic growth blew past expectations in May as the economy also notched a seventh consecutive month of expansion—a streak last seen in 2014. Seasonally-adjusted GDP growth came in at 0.6% in May, handily beating market analysts’ expectations of a tepid 0.2% month-on-month rise and sailing past the 0.2% expansion recorded in April. May’s print appeared to confirm the improving health of the economy and more than kept it on-track to meet the Bank of Canada’s revised 2.8% GDP growth target for the year.
May’s print, released by Statistics Canada, recorded growth across 14 of the 20 included sectors. Goods-producing industries experienced a recovery in growth as a result of a strong performance in the mining, quarrying, oil and gas sector—propelled by non-conventional extraction in Alberta. Moreover, most manufacturing sub-sectors expanded in the month. On the other hand, the construction sector was down in May as unionized workers in Québec went on strike. Residential construction, for its part, slowed for a second consecutive month. Service-producing industries recorded modest growth as finance and insurance services notched expansions. Both wholesale and retail trade sectors also performed impressively in the month.
On an annual basis, GDP growth blasted through a 17-year record in May, jumping to 4.6% (April: +3.3% year-on-year). Meanwhile, annual average GDP growth climbed to 2.3% from 1.9% a month earlier.
Author: Christopher Thomas, Economist