Canada GDP May 2017

Canada

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.

In July, the Bank of Canada upwardly revised its 2017 GDP forecast to 2.8% and its 2018 GDP forecast to 2.0%. Striking a broadly similar tone, our FocusEconomics Consensus Forecast panelists expect the economy to grow 2.5% in 2017, which is unchanged from last month’s forecast. For 2018, our panelists expect the economy to grow 2.0%.


Author:, Economist

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Canada Monthly GDP May 2017

Note: Month-on-month changes of seasonally-adjusted GDP and year-on-year variation in %.
Source: Statistics Canada (SC) and FocusEconomics calculations.


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