Canada’s economy contracted 0.2% in May due, in large part, to a slowdown in oil production.
Preliminary data from Statistics Canada showed that the country’s gross domestic product
(GDP) fell into negative territory in May as output slowed in the oil and gas, construction, and
manufacturing sectors.
May’s result followed GDP gains of 0.3% in April and 0.7% in March.
Despite May’s slowdown, Canada’s economy is on track to record second-quarter annualized
growth of nearly 4%, according to Statistics Canada. That would be above first quarter
annualized growth of 3.1% when COVID-19 restrictions were in place across much of the
country.
Economists said that the slump in economic activity during May might reflect maintenance
shutdowns at oil production facilities in western Canada.
The maintenance comes after a big jump in energy activity in April, when Canada’s oil and gas
extraction sector expanded 3.3%, its biggest monthly growth rate since 2020.