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Canadian economy rebounds 0.1% in April, as forecast

Canada’s economy grew at 0.1 per cent in April following a decline the month before, according to figures from Statistics Canada.

Economic output improved in the manufacturing and service sectors, but mining and oil and gas extraction continued to fall, putting a drag on gross domestic product.

The 0.1 per cent growth rate in April was in line with economists’ expectations.

The economy shrank by 0.2 per cent in March, after a 0.1 per cent contraction in February. In January, the economy grew by 0.5 per cent.

In April, there was a 2.4 per cent decline in oil and gas extraction compared with the previous month, mainly as a result of maintenance shutdowns at upgrader facilities. That was before the impact that might be felt from the Fort McMurray, Alta., wildfires in May.

There were signs of life in mining, however, with iron ore extraction returning to normal levels and metal ore mining increasing a sharp 7.1 per cent. Commodity prices for metals and minerals rose this spring after correcting sharply over the last two years.

Manufacturing rose by 0.4 per cent for the month and 1.4 per cent in the last year, driven mainly by transportation equipment manufacturing and primary metal manufacturing.

There were also big gains in the service sectors, including transportation and warehousing and finance and insurance.

The impact of the Fort McMurray wildfires may hurt Canada’s GDP numbers in May. And the impact of the Brexit vote may affect the economy further down the road.

But an improved first quarter number out of the U.S. seems to point to better potential for Canada’s manufacturing sector.

On Thursday, the U.S. issued a new estimate for first quarter GDP, raising it to 1.1 per cent from 0.8 per cent.

CBC | Business News