Canadian GDP Shrinks in May as Recession Fears Grow

The Canadian economy shrank for the fifth consecutive month in May, by 0.2 percent from April, strengthening the probability that the country was in recession in the first half of the year, according to Statistics Canada data released on Friday.

Economists had said that even if there had been no change in gross domestic product for May, which is what they had forecast, it would have required extraordinarily strong growth in June to avoid a second quarterly fall in GDP.

The Canadian economy is estimated to have shrunk by an annualized 0.6 percent in the first quarter because of the oil price crash. U.S. GDP, in contrast, rose by 0.6 percent in the first quarter and 2.3 percent in the second.

Canada’s fall in May was led by manufacturing (-1.7 percent) and mining and oil and gas extraction (-0.7 percent). Goods-producing industries fell 0.6 percent and services 0.1 percent. Rises were seen in construction, the agriculture and forestry sector, retail, and accommodation and food services.

One bright spot on the energy front was that though there was less production, support activities for mining and oil and gas extraction advanced 2.8 percent, after rising 9.6 percent in April, with both drilling and rigging services increasing.

via Reuters

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza