Canada’s economy may have grown in second quarter
OTTAWA — Statistics Canada says the economy appears to have grown in the second quarter of the year despite two months of setbacks.
The agency says its preliminary estimate is that the economy grew at an annualized rate of 2.5 per cent between April and June.
Real gross domestic declined by 0.5 per cent in April and the agency said Friday that May saw a decline of 0.3 per cent.
The decline put total economic activity about two per cent below pre-pandemic levels seen in February 2020.
Statistics Canada says its preliminary estimate is that real GDP grew by 0.7 per cent in June as pandemic restrictions started to ease across the country.
The agency says that with growth in June, total economic activity was about one per cent below pre-pandemic levels.
The early estimate for the second quarter just outpaced the Bank of Canada’s most recent expectations.
Earlier this month, the central bank forecasted that the economy would grow at an annualized rate of two per cent in the second quarter, down from its earlier estimate of 3.5 per cent, pointing to restrictions that were in place for much of the three-month stretch.
For May, Statistics Canada says retail declined by 2.7 per cent after a drop of 5.7 per cent in April as the sector was weighed down by restrictions on in-person shopping meant to combat the third wave of COVID-19.
Accommodation and food services sector was similarly affected by restrictions and declined by 2.4 per cent in May, which was not as bad as the 4.3 per cent drop in April.
Statistics Canada says manufacturing declined 0.8 per cent in May, marking the third contraction in four months.
The agency also notes that residential building construction dropped 4.2 per cent in May, down for the first time since November 2020, and a decline of 0.4 per cent in the real estate sector as home resale activity slowed.
Statistics Canada says the easing of public health restrictions in many provinces in June helped reverse the slide in sectors reliant on in-person services, like retail, accommodation and food services, which all saw growth.
The agency adds that there were also gains in manufacturing in June, while construction and wholesale trade appear to have contracted.
The figures for June and the second quarter will be finalized at the end of August.