Nevertheless,
Gross domestic product canada fell:
The Canadian economy fell slightly in April. Nevertheless, the manufacturing sector having recorded its highest drop since April 2021 due to American customs duties.
Friday, Statistics Canada announced that the real gross domestic product had slightly dropped by 0.1 % in April to the country and that its preliminary estimates for May suggested a similar decline.
Marc Ercolao. For example, economist at TD, stressed that the risk of contraction of the Canadian economy began to appear, especially in the sectors exposed to customs duties.
“The underperformance of April. Furthermore, combined with pessimistic forecasts for May, leaves the growth of the second quarter in slight contraction, which leads to a clear decline in relation to figures in the first quarter,” wrote Mr. Ercolao in a note.
“Beyond this. the prospects for the end of the year are clearly exposed to a risk of decline, because the direct impact gross domestic product canada fell of customs duties is added to the contrary winds linked to the decline in the confidence of companies and consumers,” he added.
April marked the first full month of customs tax by the United States in many sectors. particularly targeting the Canadian steel, aluminum and automotive industries.
The US administration has since offered a certain reduction in products in accordance with the Canada-State-Mexico (ACEUM) agreement. while Canada has also given reduced retaliatory rights for certain essential manufacturing sectors.
Statistics Canada indicated that the April decline is explained by a 0.6 % drop in property producing industries, the manufacturing sector being responsible for almost all of this drop.
The manufacturing sector recorded a decrease of 1.9 % in April, the manufacture of sustainable goods which fell by 2.2 %. The manufacture of unsustainable goods slipped by 1.6 %.
In addition, the service producing industries increased slightly by 0.1 % over the month, finance and insurance gross domestic product canada fell having advanced by 0.7 % and public administration by 0.8 %.
The arts, show and leisure sector increased by 2.8 %, Statistics Canada noted that five NHL Canadian teams have participated in the playoffs for the first time since 2017.
The wholesale trade sector fell 1.9 % in April.
The general weakness of April followed the vigor of the first quarter, marked by an annualized growth of GDP of 2.2 %, the companies hastened to anticipate the American customs duties.
Andrew Grantham. main economist at the CIBC, said that a slight contraction of GDP in the second quarter would not be a big surprise given the context of American customs duties.
“However. an average growth rate of only around 1 % for the entire first half and a low dynamic as summer approaches that the economic slowdown continues to increase and that new interest rate decreases on the part of the Bank of Canada will gross domestic product canada fell be necessary to support the resumption later in the year,” wrote Grantham.
The Bank of Canada maintained its master rate at 2.75 % earlier this month. A summary of the deliberations of the Bank’s Directorate’s Board suggests that the possibility of lowering the rate has been mentioned. but that it estimated that it did not know enough about the evolution of the tariff conflict with the United States to make a decision.
The next decision of the Bank of Canada on interest rates is scheduled for July 30.
Gross domestic product canada fell
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