Canada’s economy shrank slightly for the second month in May. Real gross domestic product (GDP) edged down 0.1 per cent, reflecting a slowdown in goods production while most service industries remained flat.
The mining, quarrying, and oil and gas extraction sector saw a 1.0 per cent drop, reversing two months of growth. The biggest hit came from oil sands extraction, which fell 3.0 per cent as several facilities in Alberta continued maintenance and repairs. Mining outside of the oil and gas sector also declined across the board.
Some recovery was seen in conventional oil and gas extraction, which rose 1.5 per cent due to increased natural gas and crude oil output. However, the gains were insufficient to offset the broader decline in the resource sector.
Manufacturing rebounded in May, rising 0.7 per cent after a sharp 1.8 per cent decline in April. Durable goods manufacturing increased 1.2 per cent. However, machinery manufacturing continued to struggle, falling 1.7 per cent and reaching its lowest point in over three years.
Non-durable goods manufacturing edged up 0.2 per cent. Chemical production saw strong gains, especially in pharmaceuticals, which jumped 8.0 per cent. But refinery output dropped 4.9 per cent due to plant maintenance, limiting overall growth.
Despite May’s improvement, manufacturing activity remained 1.1 per cent in March.
Real estate and rental activity rose 0.3 per cent, thanks to a 3.5 per cent jump in home resales, particularly in the Greater Toronto Area. Legal services also increased by 0.5 per cent.
Transportation and warehousing grew by 0.6 per cent. Rail transportation saw a 1.9 per cent boost as more freight moved after a weak April. Pipeline transportation rose 1.3 per cent following the restart of a pipeline that had spilled the previous month.
At the same time, retail trade declined by 1.2 per cent. Car dealerships led the drop, with a 4.8 per cent decrease in activity. Sales also fell at grocery stores and gas stations.
Public sector output dropped 0.2 percent due to a 0.8 percent decline in public administration. Federal government departments also saw a 3.2 percent decrease. Health care and education both posted slight gains.
The arts, entertainment, and recreation sector rose 0.2 per cent, driven by a 1.2 per cent increase in performing arts and spectator sports. For the first time since 2004, three Canadian NHL teams reached the second round of the playoffs, bringing more games to Canadian arenas and boosting activity in the sector.
With ongoing trade pressures, uncertain consumer spending, and a weak resource sector, the Canadian economy remains under strain.