Canada. Real GDP declined in May

Real gross domestic product (GDP) decreased 0.5% in May, a faster rate of decline than in the previous three months. Over the last four months, the goods-producing industries have contributed the most to the decrease in real GDP, while the output of the service sector has remained essentially unchanged.

The energy and manufacturing sectors were the main contributors to May's decline. Construction and wholesale trade also decreased. Conversely, the activities of real estate agents and brokers as well as retail trade advanced in the month.

Energy sector output drops

The output of the energy sector dropped a further 2.3% in May. Oil and gas extraction as well as associated support activities posted significant declines. Both petroleum and natural gas production were hampered by falling export demand. Maintenance work at some crude petroleum facilities also lowered production. Natural gas storage increased in the month.

Elsewhere in the energy sector, electricity generation, the distribution of natural gas and pipeline transportation were all down for the month.

The output of the mining sector excluding oil and gas extraction decreased 0.9% in May, with both metal and non-metal ore mines retreating. Other non-metallic mineral mines (which include diamond mines) led the decline.

Manufacturing falls

The manufacturing sector continued to fall in May (-1.6%). About half of the decrease was due to a 21% drop in motor vehicle manufacturing, following three months of recovery, and an 8.2% decline in parts production. The temporary closure of two assembly plants, combined with the discontinuation of the production of a model line in Canada, contributed to this decline. Output was also down in primary metal, fabricated metal products, and machinery manufacturing. Overall, 16 of the 21 major groups retreated in the month. However, the manufacturing of chemicals and petroleum and coal products advanced.

Construction down

Construction activity was down 0.7% in May. The declines in residential building construction (-2.4%) and engineering and repair work (-0.2%) outweighed the 0.9% increase in non-residential building construction.

For residential structures, both the construction of new dwellings as well as alteration and improvement work retreated. In contrast, all categories of non-residential buildings (industrial, commercial and institutional) rose.

Home resale market increases

The home resale market continued to show upward momentum in May, leading to an 8.2% increase in the output of real estate agents and brokers. The output of this industry returned to the level of May 2008.

Retail trade is up, while wholesaling activity is down

Value added in retail trade was up 0.6% in May as the volume of activities in all retail categories, excluding building and outdoor home supplies, rose. Notable increases were posted by new car dealers, furniture, home furnishings and home electronics, and food and beverage stores.

The volume of wholesaling activities decreased 0.4% in May. Declines were led by the wholesaling of food, beverage and tobacco products, grains and automotive products.

Finance and insurance essentially unchanged

The output of the finance and insurance sector was essentially unchanged in May. An increase in the activities of securities brokers was offset by declines in insurance services and credit intermediation (lending and banking activities).

Other industries

The weakness in some sectors of the economy led to a reduction in the output of truck and rail transportation services. Activities in the air transportation industry also declined in May, in parallel with a decline in the number of overnight travellers to Canada.

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