Saturday, May 31, 2025

Latest

Canada’s Economy Weakening Amid High Inflation, Rising Rates

Canada’s economy showed signs of losing steam over the past two months, as persistently high inflation and subsequent rising interest rates weigh down on output.

Latest data from Statistics Canada shows that GDP growth did not change in May, following a 0.3% increase in the prior month. Although the country’s services-producing industries expanded by 0.4%, the gain was largely offset by a decline of 1% across goods-producing industries. Meanwhile, preliminary estimates suggest that output rose only a paltry 0.1% in June, with increases being noted across construction, manufacturing, and accommodation and food services sectors.

Canada’s transportation sector experienced notable growth in May, rising 1.9% amid a boost in air transportation that was driven by increased movements of passengers and cargo. Likewise, the accommodation and food services sector expanded 1.9%, marking the fourth straight month of gains. Favourable weather conditions also helped the country’s agricultural and forestry sector grow by 1.6%, as high precipitation across the prairies aided during the seeding season.

On the other hand, though, the manufacturing sector slumped 1.7% in May for the first time following seven consecutive months of growth. The construction sector— which up until now benefited from a booming real estate market— contracted for the second straight month, falling 1.6% in May. Residential building construction declined for a second time, amid a drop in the construction of new single-family homes. Canada’s oil and gas sector also didn’t fare too well in May, declining for the first time in four months.

The latest results point to a GDP level that is weakening from robust gains following the lifting of Covid-19 restrictions and a rebound in the broader global economy. The Bank of Canada recently delivered a colossal interest rate increase of 100 basis points in July, in an effort to slow down the highest inflation in 40 years. “The Bank of Canada is still on course to deliver another non-standard rate hike at its next meeting,” warned CIBC economist Andrew Grantham as cited by Bloomberg.


Information for this briefing was found via Statistics Canada and Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply

Video Articles

How To Profit From $3300 Gold? An Inside Look At A Massive 300,000 Oz Project | Martino De Ciccio

We’re At The Start of a Great Silver Boom | Ross McElroy & Andy Bowering – Apollo Silver Corp

Equinox Gold Q1 Earnings: When Everything Goes Wrong

Recommended

ESGold Begins Concentration Tests Ahead Of First Production

Sterling Metals Hits 0.21% Copper Over 482.8 Metres In First Drilling At Soo Copper project

Related News

Federal Reserve Holds Interest Rates Near Zero, Bond Purchases at $120B… Again

Alas, another FOMC meeting has come and gone, and interest rates are still at near-zero,...

Thursday, July 29, 2021, 12:40:00 PM

US Jobless Claims Unexpectedly Fell Last Week: More Interest Rate Hikes To Come?

In further evidence that the US labour market remains resilient despite the Fed’s hawkish tightening...

Thursday, February 16, 2023, 11:21:00 AM

US Mortgage Rates Soar to 9-Month High

Marking the sixth straight week of increases, US mortgage rates jumped to their highest level...

Friday, March 26, 2021, 02:43:00 PM

Inflation Has Already Arrived for the Goods that Americans Actually Need

Back in August, the Federal Reserve revealed a new model to meet inflation targets, called...

Friday, October 2, 2020, 11:31:00 AM

The Fed May Be Forced To Raise Interest Rates More Aggressively Than Many Expect Based On Rate Comparison

To combat significant and growing inflationary pressures, the U.S. Federal Reserve Board plans both to...

Monday, February 14, 2022, 04:17:00 PM