Canada’s real gross domestic product edged down 0.1 percent in April, reversing a modest 0.2 percent gain in March, as broad-based declines in the manufacturing and wholesale trade sectors offset gains in services and public administration.
The goods-producing side of the economy shrank by 0.6 percent in April, with manufacturing accounting for nearly all of the decline. The manufacturing sector contracted 1.9 percent, marking its sharpest drop since April 2021. Both durable and non-durable goods manufacturing posted declines, with durable goods down 2.2 percent as eight out of ten subsectors contracted. Transportation equipment manufacturing fell 3.7 percent, its largest monthly contraction since September 2021, driven by a steep 21.6 percent drop in other transportation equipment and a 5.2 percent decrease in motor vehicle manufacturing. The sector was hit by lower exports and production cutbacks amid uncertainty over tariffs imposed on vehicle exports to the United States.
Non-durable goods manufacturing fell 1.6 percent, led by food manufacturing, which dropped 3.6 percent, and petroleum and coal products, which declined 5.9 percent as refineries undertook maintenance work.
The wholesale trade sector also contracted 1.9 percent, its largest decline since June 2023, as seven of nine subsectors reported lower activity. Motor vehicle wholesaler-distributors were the largest drag, down 6.8 percent, reflecting reduced trade volumes.
In contrast, services-producing industries edged up 0.1 percent. Public administration expanded 0.8 percent, buoyed by increased federal government activity during the national election. Finance and insurance rose 0.7 percent, driven by heightened market activity following tariff announcements and a subsequent rebound in equity markets. The arts, entertainment and recreation sector surged 2.8 percent, supported by strong attendance at sporting events.
Looking ahead, preliminary estimates suggest real gross domestic product declined a further 0.1 percent in May, with continued weakness in mining, public administration, and retail trade partially offset by gains in real estate. Official data for May will be released at the end of July.
Information for this story was found via StatCan. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
