(OTTAWA) Canada’s economy remained essentially stable in April, after growing slightly in March, Statistics Canada said Friday.
The figures for the month of April turned out to be weaker than those expected by the federal agency. The production of services-producing industries remained unchanged, while that of goods-producing industries increased by 0.1%.
According to Statistics Canada’s preliminary estimate, gross domestic product advanced 0.4% in May, led by the manufacturing and wholesale trade sectors. However, this forecast will be revised before the publication of official data, expected in a month.
Economists generally expect the Canadian economy to stall in the second half of the year, and even begin to contract, as high interest rates weigh on consumer spending and companies.
Still, Bank of Montreal chief economist Douglas Porter pointed out that the release of April’s gross domestic product (GDP) report had multiple qualities, despite its “stagnant” reading.
“The big picture shows that the Canadian economy is managing to keep its head above water in the face of many challenges,” he said in a note to clients.
Although GDP was flat in April, it showed positives, like May’s preliminary reading, Porter said.
The “vigorous” 0.4% growth predicted for May suggests the economy is “regaining some momentum, rather than fading into the summer,” he said.
In April, the mining, quarrying, and oil and gas extraction group grew 1.2%, supported by all of its subsectors. It was its fourth consecutive month of growth.
The wholesale sector contracted for a third consecutive month in April, retreating 1.4% as activity declined in six of its nine sub-sectors.
Canada’s public sector also contracted as a strike by federal workers reduced activity in April, Statistics Canada said.
The public sector, which includes educational services, health care and social assistance and public administration, fell 0.3% in April, the agency said.
While educational services and health care and social assistance services remained stable, public administration recorded a decline of 1.0%, the largest since April 2020.
At the federal level, a strike by Public Service Alliance of Canada workers led to a 4.3% contraction in the federal public administration, excluding the defense sector.
Mr. Porter of the Bank of Montreal said April’s flat reading, against the backdrop of the massive strike by federal civil servants, was “far from a bad outcome at the end of the day.”
“Even with one of the largest strikes in years in April, the economy has not declined,” he said. The economy has yet to see a negative monthly reading so far in 2023, an impressive result given widespread recession forecasts at the start of the year. »
Meanwhile, construction activity rose 0.4% in April, as a decline in residential building construction was more than offset by widespread increases in other types of construction.
The real estate and rental and leasing services sector grew for a sixth consecutive month, rising 0.5% in April – its highest growth rate since December 2020.
The manufacturing sector fell 0.6%, posting its first decline in four months, as both durable and non-durable goods manufacturing fell in the month.
The transportation and warehousing sector rose 0.4% for the second consecutive month, with six of its nine subsectors rising in April.
