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The agency also estimated that GDP for June grew 0.1 per cent, an advance estimate that may be revised.
If the estimate is right, Canada’s economy would have grown 0.5 per cent in the second quarter after a growth of 0.4 per cent in the first three months of 2024.
“Canada’s economy did marginally better than we expected,” Avery Shenfeld, chief economist at CIBC Capital Markets, said in a note on Wednesday. “The data will likely see some small upward adjustments to forecasts for the second quarter’s GDP, but not enough to stand in the way of a further rate cut in September.”
Statistics Canada’s GDP updates play an important role in the Bank of Canada’s interest rate decisions. The central bank made two consecutive cuts in the past three months after a long pause. The next interest rate announcement is set for September.
The latest data showed that growth in the goods-producing industries rose by 0.4 per cent in May, the main contributor to the overall growth in the economy, the agency said. Growth in the services-producing sector edged up 0.1 per cent. Fifteen of the 20 sectors that Statistics Canada observes expanded in May.
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Crude oil and other pipeline transportation industry rose 1.5 per cent, reflecting the expansion of the Trans Mountain Pipeline — which officially opened in May and connects Alberta and British Columbia.
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The retail trade sector was the “largest detractor to growth” in May, shrinking 0.9 per cent, Statistics Canada said. Food and beverage stores were down 2.3 per cent, health and personal care stores were down 1.4 per cent, and general merchandise stores were down 1.4 per cent.
The goods-producing industries grouping (0.4 per cent) was the main contributor to overall growth, with four of its five sectors increasing in May. Services-producing industries edged up 0.1 per cent.
• Email: nkarim@postmedia.com
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