Statistics Canada will release its May gross domestic product report this morning. A shopper pushes a shopping carts as they leave a Real Canadian Superstore in Ottawa on Tuesday, June 25, 2024. THE CANADIAN PRESS/Sean Kilpatrick
OTTAWA – The Canadian economy grew 0.2 per cent in May, led by expansions in manufacturing and the public sector, Statistics Canada reported Wednesday.
The federal agency’s gross domestic product report says retail and wholesale trade as well as the oil and gas sector weighed on growth.
However, it highlights the Trans Mountain pipeline expansion’s contribution to economic growth that month.
“The crude oil and other pipeline transportation industry rose 1.5 per cent, reflecting in part commencement of the expanded Trans Mountain pipeline as the first tankers carrying Western Canadian oil departed from the Port of Vancouver in late May,” the report says.
The federal agency estimates that growth was tempered slightly in June to 0.1 per cent, with growth in construction, real estate and rental and leasing and finance and insurance partially offset by decreases in manufacturing and wholesale trade.
For the second quarter, Statistics Canada expects real gross domestic product grew at an annualized rate of 2.2 per cent.
The latest economic growth figures come one week after the Bank of Canada lowered its key interest rate for a second time in a row.
Governor Tiff Macklem said the central bank’s decision was partly driven by weakening economic conditions.
While the economy has not dipped into a recession, growth has been meagre, particularly when taking population growth into account.
The labour market has also felt the weight of high borrowing costs, with graduates and newcomers particularly affected by dwindling job opportunities.
The unemployment rate has steadily climbed over the last year, reaching 6.4 per cent in June.
The Bank of Canada’s interest rate cuts are expected to take some of the pressure off of the economy, though at 4.5 per cent, its benchmark rate continues to restrict economic growth.
This report by The Canadian Press was first published July 31, 2024.
