Statistics Canada to release GDP figures for May amid growing recession talk

OTTAWA-Canada’s economy shrank for a fifth straight month in May, weighed down by weak output in manufacturing, oil and gas extraction and wholesale trade.

The drop was worse than the flat showing that a consensus of economists polled by Bloomberg had been expecting.

The poor performance in May bolstered the view that Canada experienced a recession in the first half of 2015.

“There is no sugar-coating this one”, said BMO chief economist Douglas Porter in a note to clients.

Canada’s economy shrank by 0.2 per cent in May, the fifth straight monthly decline.

Economists had said that even if there had been no change in gross domestic product for May, which is what they had forecast, it would have required extraordinarily strong growth in June to avoid a second quarterly fall in GDP.

The currency extended declines on Friday’s report, dropping as much as 0.7 percent to C$1.3094 versus its U.S. counterpart.

“I’m not going to engage in a debate about what we call this”, Poloz said earlier this month after the central bank predicted the economy contracted an a 0.5 per cent annual pace in the second quarter.

“Support activities for mining and oil and gas extraction increased 2.8 per cent in May, after rising 9.6 per cent in April, as both drilling and rigging services advanced again”. The services side of the economy, which accounts for over two-thirds of total output, slipped 0.1%. Manufacturing output dropped 1.7 percent, with widespread decreases across a number of industries, the statistics agency said. Wholesale trade contracted 1.0% in May.

Oil and gas extraction fell 1 percent in May, extending a 3.4 percent decline a month earlier.