GDP shrank in May, the fifth consecutive monthly decrease

Statistics Canada says the drop was mostly a result of contractions in manufacturing, mining, quarrying and oil and gas extraction

(The Canadian Press)

(The Canadian Press)

OTTAWA — The Canadian economy contracted in May, the fifth consecutive monthly decrease, increasing the possibility the country slipped into a recession in the first half of the year.

Statistics Canada said Friday real gross domestic product fell 0.2 per cent in May due mostly to weakness in manufacturing, mining, quarrying and oil and gas extraction as well as wholesale trade.

Economists had expected no change for the month, according to Thomson Reuters.

“There is no sugar-coating this one,” said BMO chief economist Douglas Porter in a note to clients. “It’s a sour result.”

The drop in the economy came as goods-producing industries fell 0.6 per cent in May, including weakness in manufacturing and the oilpatch.

Manufacturing output contracted 1.7 per cent in May, while mining, quarrying, and oil and gas extraction fell 0.7 per cent.

Meanwhile, the service-providing industries edged down 0.1 per cent in May after increasing for three consecutive months.

Wholesale trade fell 1.0 per cent in May, but retail trade rose 0.5 per cent for the month.

The Canadian economy contracted at an annual pace of 0.6 per cent in the first quarter.

Concerns of a possible recession, defined as two consecutive quarters with no economic growth, have grown in recent weeks.

But some economists have said Canada hasn’t exhibited some of the classic hallmarks of a recession, citing the country’s job growth and stable employment rate.

Bank of Canada governor Stephen Poloz, in deciding to cut his key interest rate by a quarter of a percentage point to 0.5 per cent in an effort to boost the economy, carefully avoided saying the word “recession.”

“I’m not going to engage in a debate about what we call this,” Poloz said earlier this month after the central bank predicted the economy contracted an a 0.5 per cent annual pace in the second quarter.

Still, low oil prices and weak exports have bruised the economy this year, casting doubt on the federal government’s promise to balance the books as it heads into an election.

Estimates for economic growth this year have been slashed and now stand below the levels forecast when Ottawa tabled its budget in the spring.

But Prime Minister Stephen Harper said last week that his government was “well ahead” of its own forecast for a balanced budget despite the economic struggles.

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GDP shrank in May, the fifth consecutive monthly decrease

  1. Ahh…this is more of the brilliant handling of the economy we’ve come to expect from the Cons!

    • No where near landing. As Wynne needs BoC to devalue our money more, to buy Wynne debt as no one is really lending Wynne $30 billion a year so she can pay debts and the bills. Look at CAD money and GDP being devalued 33% in 2 years as a cumulative devaluation tax on all Canadians wages, pensions, savings, and more.

      And Wynne’s celebration of idiocracy thinks we should invest in 16% per year loser Ontario why? Better to park 93% of my money in a USD account and let the suckers take the currency bath.

      Fact is all 5 of our useless wasteful layers of corrupt governance screws all of Canada, its a big greed fest between cities, provinces, Ottawa, FN and mafia on who can screw the people that make this country work. Its a war on the middle class non-govmint workers, pensioners, disabled and low income to feed the government greed.

      Canada isn’t worth saving or investing in. Take Wynne’s pension greed, government can’t manage their own pensions right without a taxpayer top up, CPP ROI is downright pathetic, in 16% per year 2 years runnign devalued miney wahy save pension money in Canda?

      I made off like bandit putting most of my assets including pension in US and foreign over 2 years ago. But the amount of economic propaganda in Canada is amazing. Government greed managing economically stupid people will not end well for most.

  2. Oh ho! The BMO CEO won’t be a friend of the PMO anymore.
    He should follow instructions, like the recession-denying economists at the CD Howe Institute.

  3. BMO claims the report can’t be coated in sugar, so it will be just coated in a massive continuation of the attack ads swamping Canadian media for the next few months

  4. Anyone can make GDP look good if you devalue money used to measure it.

    Now adjust the numbers to more stable world currencies like USD or Yuan. Even Mexican Pesos for that mater. Now you will see in just 2 years, Canada was devalued 33% or so. Yep, a whoping 33% devaluation of Canada’s money, GDP, wages, pensions, savings, and more.

    Blaming just oil is BS too. Oil was just the straw that broke the camels back as all other provinces were bankrupt, dysfunctional, screwed up economies when oil was last at $100. Yep, but crooked mayors, premiers like debt deity Wynne, Harper and others bet on tax-debt-devalue-spend. Well, only idiots and fools think you can debt-spend out of a governemtn bloat and debt problem.

    Yep, politicians and dysfunctional layers of useless, inefficient, wasteful governance, all just screwed Canadains that make this country work for their greed.

    Ontario and Quebec so dysfunctional economically, they are like Greece, can’t borrow money on real markets, they need a thin air loan to pay their debts. Yep, I just said Canada is bankrupt like Greece, as no loan is a default. When the public figures out how screwed they are, there is going to be a wave of change…..

  5. The CONServatives didn’t recognize the 2008 recession why should this one be any different?

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