A preliminary estimate shows that Canada’s real Gross Domestic Product (GDP) decreased 0.1% in May as U.S. import tariffs and declining consumer sentiment impacted the economy.
The May GDP estimate will be updated by Statistics Canada on July 31 with the release of the official GDP data for that month.
May’s early look was included in the GDP data for April that showed Canada’s GDP also fell 0.1% during that month following a 0.2% increase in March of this year.
The April contraction in Canada’s economic activity comes as goods-producing industries declined 0.6%, with the manufacturing sector accounting for nearly all of that drop.
Durable goods manufacturing (-2.2%) was down for the first time in four months as 8 of 10 subsectors contracted.
At the same time, non-durable goods manufacturing (-1.6%) contracted for the fifth time in six months in April, with food and petroleum contributing the most to the decrease.
Wholesale trade contracted 1.9% in April, recording the largest monthly decline since June 2023, as activity subsided in seven of the nine subsectors.
Motor vehicle and motor vehicle parts (-6.8%) were the largest detractors to growth, as exports and imports of such products dropped sharply in April.
However, Statistics Canada said that the finance and insurance sector rose 0.7% in April. It was the largest monthly increase since August 2024.
The public sector comprising educational services, healthcare, and public administration expanded 0.4% during April, partially offsetting the overall decline.
The mining, quarrying and oil and gas extraction sector was essentially unchanged in April, although the oil and gas extraction subsector contracted 0.6% during the month.
There has been evidence that Canada’s economy has been slowing in recent months as U.S. tariffs on Canadian goods rattle industry and shake consumer confidence.
