Canadian real GDP grew 0.2 per cent in May, following a 0.3 per cent increase in April. The growth was driven by goods-producing industries (+0.4 per cent), in which 4 of 5 sectors grew, led by manufacturing (+1 percent) and agriculture, forestry, fishing and hunting (+0.9 percent). However, the mining, quarrying, and oil and gas extraction sector contracted by 0.6 per cent in May, entirely driven by a 2.1 per cent decrease in the oil and gas extraction subsector. Service producing industries grew by 0.1 per cent, with both retail trade and wholesale trade contracting by 0.9 per cent and 0.8 percent, respectively. Finally, the GDP for the offices of real estate agents and brokers grew by 0.17 per cent in May. Preliminary estimates suggest that output in the Canadian economy grew by 0.1 per cent in June, as well as about 2 per cent in the second quarter of 2024, on an annualized basis.

BCREA estimates that the B.C. economy grew by 1.4 per cent year-over-year in May. This slightly outpaces the 1.1 per cent year-over-year growth for the Canadian economy. To see the full details of our Nowcast, click here: https://infogram.com/bcrea-nowcast-for-may-2024-and-june-2024-prelim-july-31-2024-1h0n25ok1n5kl4p?live

Canada's economy expanded at a reasonable rate that matched analyst expectations in May, following the anticipated 25 basis point cut from the Bank of Canada last week. Amidst weakening labour markets and relatively flat inflation levels over the second quarter, this report is unlikely to deter the Bank of Canada from pursuing a gradual decline in the overnight rate throughout the rest of 2024 and into 2025. However, they will be watching next month’s CPI and jobs report to determine whether market expectations changed following their first cut. 

https://mailchi.mp/bcrea/monthly-economic-growth-may-2024

For more information, please contact: Gino Pezzani.