MNI 5 THINGS: Canada GDP Beats Expectations, Returns To Normal>

--5 Things We Learned From Canadian GDP Data

By Yali N'Diaye

     OTTAWA (MNI) - The following are the key points from the May data 

on Canadian GDP by industry released Tuesday by Statistics Canada: 

     - Canada GDP rebounded 0.5% in May after edging up 0.1% in April, 

the largest gain in a year, and beating market expectations of a 0.3% 

increase. Output expanded in 19 of 20 sectors, showing the widespread 

nature of the gains as activity returned to normal following the 

negative impact of inclement weather in April. 

     - GDP in good-producing industries rebounded 0.6% after a 0.2% 

advance in April. The services sector rebounded 0.5% after a flat 

performance in April, a gain last matched in March 2017. Overall the 

report supports the Bank of Canada's expectation of a strong GDP rebound 

in the second quarter. Assuming output remained constant in June, second 

quarter GDP would grow 0.7%, following a 0.5% gain in the first quarter. 

On an annualized basis, GDP by industry would grow 3.0% after a 1.8% 

expansion in the first quarter. 

     - Within the goods-producing industries, utilities were the lone 

major category to post a decline (-2.4%) as weather conditions improved 

following a cold month of April also marked by an ice storm in parts of 

the country, which had boosted utilities output in April. Mining, 

quarrying, and oil and gas extraction posted the largest gain (+1.8%). 

Overall energy production was up 1.0%, and GDP excluding energy was 

still up 0.5%, illustrating the widespread nature of the gains. 

     - Meanwhile, manufacturing output growth slowed to 0.1% from 0.8%. 

Non-durables rose 0.9% and durables fell 0.7%.  

     - While utilities were positively impacted by the weather in April, 

other categories mostly suffered from it. As a result, the return to 

normal translated into a pickup in output. In particular, retail trade 

rebounded 2.0% after contracting 1.0% in April, marking the largest 

increase since October 2017. Wholesale trade was up 1.4%. Elsewhere, 

public administration was flat while activity for real estate agents and 

brokers contracted 2.7%, partly due to lower home sales in British 

Columbia. 

--MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com 

[TOPICS: M$C$$$,MACDS$]