Economic growth in Canada slowed in May, increasing the risk of that gross domestic product expansion will disappoint over the second quarter.
GDP grew 0.1% in May, following a healthier 0.3% expansion in April, Statistics Canada said on Tuesday.
Assuming flat results in June, the economy is on track to grow between 1.6 and 1.8% in the second quarter, according to economists at Bank of Nova Scotia. The Bank of Canada forecast 1.8% growth in the second quarter in its Monetary Policy Report released earlier this month.
The results disappointed some economists who were predicting growth to match the 0.3% increase in April.
Mining and oil and gas extraction rose only 0.6% in May, compared with 2% in April, but it was enough to offset a 0.5% decline in manufacturing over the month. As a result, goods production remained at the same level in May as the month before, Statistics Canada said.
Worries about weakening oil prices appear not to have severely impacted May’s figures, but problems for the oil and gas sector may surface in coming months. Statistics Canada said drilling and rigging services decreased in May and support services for mining and oil and gas extraction dropped 8.7% over the month.
Services industries expanded 0.1% in May on strong volumes for retail sales (which recorded monthly growth of 0.7% following a 0.9% decline in April) and wholesale sales (up 0.4% in volume terms).
