Canada's economy grows in May after a flat April

A correspondent from the Business News Network discusses the rise in Canada's GDP numbers. He says the country's employment picture appears much stronger than in the U.S.

CTV News Channel: BNN's Michael Kane on the GDP

Both Canada and the U.S. have released GDP numbers. Both numbers were a little soft, suggesting that even after all the stimulus spending some of the momentum is falling.

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A gas station attendant pumps gas Tuesday, July 21, 2009.(AP / Rick Bowmer)

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CTV.ca News Staff

Date: Fri. Jul. 30 2010 9:48 AM ET

The economy grew by just one-tenth of one per cent in May, according to the latest report from Statistics Canada.

After growth was flat in April, economists had expected the real gross domestic product to grow by 0.2 per cent.

While construction and real estate transactions were down, the modest growth rate was edged up by a third-straight month of gains in the oil, gas and mining sectors.

A slight boost in manufacturing also helped nudge the gain.

"That's a little encouraging because we look very closely at manufacturing as a bellwether of the Canadian economy as a whole," BNN's Michael Kane said Friday.

Highlights from the May GDP report:

construction declined 1.6 per cent, with residential building off 3.8 per cent.
real-estate transactions were down 11.3 per cent, marking the fifth month of declines
wholesaling activities were down 1.8 per cent
reduced demand for electricity saw utilities decreased for a third consecutive month

Kane says the numbers are soft both in Canada and the United States where the quarterly growth rate has just been pegged at 2.4 per cent.

"After all the stimulus spending that the two governments have made to get out of the recession and economic downturn, we're starting to see some of that momentum fall," Kane told CTV News Channel, noting there are some "bright lights."

The finance and insurance sector grew by 0.5 per cent, on the back of increased banking activity and stock trading. Retail trade was also up, with notable increases in clothing, accessories, food and beverages.

In his latest interest rate adjustment, Bank of Canada governor Mark Carney scaled back expectations for Canada's GDP, from 3.7 per cent growth to 3.5 per cent in 2010. The economy won't be up to speed until late next year, the central bank said.

Analyzing the latest numbers, Kane says overall assumptions for the year shouldn't change as a result.

"We do know in both the case of the United States and Canada the recession is long over, there should be no question about that. This little slowing of economic growth is just what you see at this point in the economic cycle."

Canada's GDP grew by 6.1 per cent in the first quarter of this year, the fastest growth in a decade.

Comments are now closed for this story

Lunt
said

I cannot believe it only grew by 0.1%....you should have seen the excessive layers of tinfoil my neighbour wrapped her potatoes in for the grill....that alone should have bumped it up by 0.1%.......

BJ
said

Okay so how does this translate to bread and butter on the unemployed table?

Well GM closed its WINDSOR Plant and so did FORD.. I wonder what they will give us next.

there should be a ban on Stats canada's information to the public as we are not sure how to interpret it. And worse of all government agencies use it on the general public YIKES...

B Vaughan
said

Must be all the Eastern Liberals complaining, my Townhouse is back to pre recession value, my RSP investments are also back to pre recession levels and I just got a 7000. a year raise ( and I'm just a Warehouse Supervisor ). Also we are havng problems hiring again ( starting wage in our warehouse is 22.00 a hour ). Stop complaining it's getting better

Linda in Vancouver
said

I think SVCR makes some salient points about taxes in BC.But I don't agree with all of the points in that post.We are seeing taxes rise a whole bunch.Mostly increseas by city and municipal governments.Their spending is out of control, and show no signs of abating. The HST and the carbon tax are unpopular,but more of a ligtning rod to protest higher taxes in general.On their own,they only amount to a hill of beans.But when added to higher user fees and things like energy and transportation,the impact is beginning to wear thin with lower and middle income workers.All at a time when there is more crying for even more spending on things like health care and education.

peter in MB
said

The reason why our economy is not growing is because under the liberal government inflations and cost of live increased as did our taxes but our wages stayed the same. I like many Canadians I have been bleed dry I can barely afford to pay my bills. We need to lower taxes so people have more money to spend on goods and services. This will in turn raise our economy. If we do not do this we will end up like communist china where people work hard all their life�s just to survive and for nothing.

Tod
said

Funny thing, we keep hearing how Canada's economy is doing so much better than other countries. in the same time period the US GDP rose 2.4%, how is Canada's 0.1% better? According to these new numbers out today the US GDP rose 24 times more than ours. Obviously our government is lying to us, did you read about the defense department hacking into Wikipedia & changing information, the IP address was tracked to the defense department? Wiki is calling it an act of vandalism, by our government. Were paying for Harper to feed us disinformation, it really makes me sick.

BMIA
said

You don't pay down a deficit - you pay down debt. It doesn't matter if the deficit is bigger than before or smaller than before because at the end of the day the debt gets bigger. It just gets bigger faster or it gets bigger slower, but it still grows.Too much government at all levels. It takes some pretty strong altruistic people within government to enact changes that would reduce government (particularly reduce government spending). The reason I say this is because I believe the people in governments function to serve themselves and not to serve the constituent and the electorate (at all levels). So anyone coming out against that will surely be punted from their own party. That's why they need to be pretty strong and altruistic.I don't see any person or group of people strong enough to enact "reducing government and reducing wasteful government spending."

SVCR
said

It looks like each province is going to have to bail itself out of this bad economy. BC is being killed by the Liberals taxing the Hell out of us with green tax and now the HST which our idiot finance minister says is not affecting our wallets.Well he is an idiot and can't balance a ball never mind our tax dollars.The new taxes on things like phones, internet, hair cuts are a big hit when you add them all up but this guy is so stupid he can't figure it out!When you add up all your bills plus purchases the extra tax paid is crazy.RECALL TIME!!Come on Mr. Vander Zalm go get them!!

Ardelle
said

Good Grief. Calgary is back on the insane treadmill. We can't get workers. If Canada experiences any growth larger than now, the labour shortage here will be worse than 2 years ago.

Tom (Kingston)
said

GDP:April = DownMay = UpJun = Up (predicted due to surge spending before HST implementation)Jul = Up (predicted due to HST added to goods and services)End result BoC will look at the number and claim economy is down well however slow growth and another interest rate increase.Aug onward will have modest if not very little growth.Dec growth will be a better than previous recession years due to modest recovery.2011 BoC will have a minor increase hike.My logical forecast as I see it. If you have a Var Mortgage keep it, down bother locking it.

PBW
said

Samual notes "A developer on BNN the other day said he had dropped his condo prices by 40%". I have to wonder whether his condos were over-priced to begin with, for I suspect he will still make a profit on each unit. Certainly, the housing market has been very strong for years, though a little less so during '08 and '09 (even though some cities, like Winnipeg, still showed growth in that area. Still, one has to ask, is a 10% or greater growth in that, or any market sustainable? Given the world economic climate, what level of growth is it reasonable to expect? If growth is present, that is, above zero, is that bad? Or is such a low, apparently sustaining and sustainable, rate of growth, not enough for those who want a quick profit in some area of business and thus are full of gloom and doom because things are not going their way? Be thankful that we have growth, and that our sales taxes have not reached the 20% level as in part of the EU, for that would certainly put a damper on sales of most everything, resulting in negative numbers and a shrinking economy.

Doug # BC
said

The information is not really news.This is exactly how economists predicted the recession would end.Though this recession was far worse and far more dangerous than other recession is recent times,"Portes" is exactly right.Like it or not, "the universe is unfolding as it should". This is an especially good day for me because my suspicions about the partisan posters are also proving correct.The "naysayers" and the "Harper Haters" are showing us all that they never let the facts get in the way when they want to spin some political talking points. Last week we had Liberals whing about the value of Stats Canada and the census.But I guess that messenger is only valuable if it delivers the "news" they want to hear.,or when they can use those tstatistics to further their socialist agenda.Now,with this story,the usdually pompous left ing posters are saying they don't trust "Stats Can",and,despite being right on a different story yesterday,"Intelligent Liberal" has returned to the nonsense that truly reveals what a partisan Liberal considers intelligent.Are you serious my friend? The statistics you now don't consider accurate were gathered under the same criteria,by the same people that have been doing this work for years.The changes you are so angered about have not even been passed into law. So far,as this recession unfolds,it is the Liberal predictions (or hopes) and fear mongering that are proving to be inaccurate.The only thing you have left to debate is your credibilty.Should things continue to go well,and you don't come up with the forttude to acknowledge that,you will be fully exposed as "the emperer with no clothes".I doubt that "Wendy" lives in BC,but if she does, she really needs to watch more news and less politics. Now,lets quit whining and get about building our country.

simon
said

0.1% is not worth reporting. And with the margin of error the headline would have been more accurate if it said "Canada's Economic growth remains stagnant at 0.1%" 0.1% is nearly the same as 0%. Who believes in STATSCAN figures anyways? They have unreliable Statistics and the Harper appointed boss has resigned!

jim from manitoba
said

doesn't matter what the polls show, the harper government is doing a good job. if the liberals, ndp, and bloc have better ideas then defeat the government and let us the voters decide who's better. enough of the all talk no action parties.

Wendy
said

BEE said 1% is better then O%. The Economy is getting better it TAKES TIME. Bee maybe you should read the article again, it says 0.1% which is pretty much nothing. If there is a margin of error then it could actually be in the negative, things are getting worst not better.

KJ in Kingston Ontario
said

Still no signs of life in the economy here......Maybe next year there will be some work.

Marg Alberta
said

Effectively 0.1% is equal to 0 statistically speaking.So to say it expanded 0.1% is misleading. A better phrase would be the economy was stagnant at 0.1% growth. Harper's zero down mortgages gave our economy the appearance of a recovery, but it created a housing bubble, everyone & their dog went out & bought, driving home prices to ridiculously over inflated. Now home prices are falling people can't afford what they bought & are trying to get out. Year over year bankruptcies were up 18.1% over last year. Yup our economy is doing real good, bankruptcies will soar in the next few years & thanks to Harper the Canadian tax payer will be on the hook.

Greg
said

The economy is going to get a lot worse before it gets better. We haven't seen a housing crash here yet which will come within a year or two at the most. It's going to get a lot worse before it really gets better. The reletively good position we are in now is just the calm before the storm and giving people a false sense of security. We haven't seen anything yet. Get ready.

Rick in NB, Ste Marie
said

@ Portes: Oh yeah, it''s some start. Realestate is in the dumper, wholesaling is down, utilities are down, but we gained 1% of the 2.4% predicted in our economy. Now you got the nerve to knock the Martin for giving us a surplus.

Sue
said

Thankfully we have had mostly liberal governments in Canada, if Harper would have gotten his way & deregulated our banks we would be in the same shape as the US. Thank goodness the liberals wouldn't allow the deregulation. Harper has done nothing good for Canada, the mess he created will start to show soon. We weathered the financial storm because of liberal policies, it has nothing to do with Harper. Soon the liberals will be back in with a majority, history repeats it's self, the cons destroy our economy, the liberals clean up the mess & put us back in surplus.

Portes
said

It is a start, Canada is doing a lot better than the US or Britain. It is naysayers that will keep out economy down. It is time that instead of always being negative to put some positive thoughts on these blogs. The economy was hard hit by the recession and what people don't realize is that it takes time to recover ,it is not a computer where you get instant results. Our deficit will be paid down a year earlier, I just wonder is and when the US will pays theirs down. People the government and previous governments did their jobs in regulating our banking industry so we did not fall into the trap that the US did. So to all Governments both present and past, I say well done. I don't want to hear the c**p about Martin and the surplus,because if it were now they would have had to do the same thing. The surplus was made by borrowing money from the EI fund, I just wonder if that has ever been paid back.

Jim
said

I'm finding it increasingly harder to believe anything this government tells us. Yesterdays news the defense departments computers were used to change information on Wikipedia site. Harper also has his people on sites like this spewing his propaganda & were paying for it, but the government hacking into wiki & changing information is so very wrong. I thought things like that only happened in places like north korea, obviously our dictator is trying every dirty trick to stay in power & cares nothing for the Canadian people.

Intelligent Liberal
said

Who cares what Stats Can says, the Head Of Their Department RESIGNED after admitting Stats Can can longer provide reliable stats.They have no credibility, they are but leaderless number crunchers floating aimlessly in the statistical winds of change.

BEE
said

1% is better then O%. The Economy is getting better it TAKES TIME.

Wendy
said

When a slight slowdown in home sales is mentioned as a contributing cause to the lower GDP figure then it's time to worry. The real estate bubble in the US masked for years the erosion of the manufacturing base until it was too late. At one point, building, selling, and financing houses made up 17% of California's economy. No doubt it's a similar statistic in British Columbia.

Samual
said

The economy is sliding further down with economists talking about deflation. There's not much for jobs here & the ones that are here have been under cut from out of town contractors. A developer on BNN the other day said he had dropped his condo prices by 40%, .1% growth is almost no growth, with home prices falling I expect things to get a lot worst before they get better.

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