In May 2024, Canada’s real gross domestic product (GDP) increased by 0.2%, following a 0.3% rise in April, as reported by Statistics Canada. This modest growth was primarily driven by the goods-producing industries, which saw a 0.4% rise, with manufacturing playing a significant role. Conversely, the services-producing industries experienced a slight uptick of 0.1%. Overall, 15 out of 20 sectors saw expansion, indicating a broadly positive economic performance for the month.
The manufacturing sector recorded a robust 1.0% growth in May, marking its largest increase since January 2023. Both durable and non-durable manufacturing contributed to this rise. Non-durable goods manufacturing grew by 1.4%, its most substantial growth since November 2023, driven significantly by petroleum and coal product manufacturing, which surged 7.3%. This increase offset a 5.0% decline in April due to maintenance activities at several refineries.
Durable goods manufacturing also saw a 0.7% increase, with the furniture and related products subsector and miscellaneous manufacturing subsector leading the gains. However, growth in this category was tempered by a 0.4% decline in the transportation equipment manufacturing subsector, attributed to retooling activities at an automotive assembly plant in Ontario.
The mining, quarrying, and oil and gas extraction sector contracted by 0.6% in May, reversing some of April’s 2.1% growth. The oil and gas extraction subsector, in particular, declined by 2.1% due to maintenance at upgrading facilities in northern Alberta, which resulted in a 3.5% drop in oil sands extraction. In contrast, the mining and quarrying (except oil and gas) subsector rose by 0.5%, driven by a 7.1% rebound in potash mining following a temporary shutdown in April.
Pipeline transportation experienced a 0.6% increase in May, largely due to the commencement of the expanded Trans Mountain pipeline. This led to a 1.5% rise in crude oil and other pipeline transportation as the first tankers carrying Western Canadian oil departed from the Port of Vancouver. However, the growth in this sector was slightly offset by a 0.2% decline in natural gas pipeline transportation.
The retail trade sector emerged as the largest detractor from GDP growth, contracting by 0.9% and negating the gains made in April. Substantial declines were noted in food and beverage stores, health and personal care stores, and general merchandise stores. However, motor vehicle and parts dealers provided some relief with a 0.8% increase.
Similarly, the wholesale trade sector shrank by 0.8% in May, following a 1.4% increase in April. The primary contributors to this decline were motor vehicle and motor vehicle parts and accessories merchant wholesalers, which fell by 4.0%, and machinery, equipment, and supplies wholesalers, which decreased by 1.2%.
Accommodation and food services grew for the second consecutive month, increasing by 0.9%, driven by a 1.2% rise in food services and drinking places. The arts, entertainment, and recreation sector also saw a 0.3% increase, buoyed by high attendance at spectator sports events, including the playoffs involving three Canadian National Hockey League teams.
The public sector, comprising educational services, health care, social assistance, and public administration, continued its positive trend with a 0.4% increase. Public administration was the most significant contributor, largely due to a rise in local, municipal, and regional public administration.
The finance and insurance sector grew by 0.2%, driven by increased activity in financial investment services, funds, and other financial vehicles. This growth was supported by heightened bond market activity and strong foreign investment in Canadian debt securities.
Preliminary estimates suggest a 0.1% increase in real GDP for June 2024, with growth in construction, real estate, rental and leasing, and finance and insurance sectors, partially offset by declines in manufacturing and wholesale trade. This preliminary data indicates that the economy expanded by 0.5% in the second quarter of 2024. The official figures will be released on August 30, 2024.
As the official data for June and the second quarter becomes available, a clearer picture of the economic trajectory will emerge.