Quebec: Real GDP Up Only Slightly in May
- Real GDP by industry grew by 0.1% in May, while April's decline was revised from -0.4% to -0.3%.
- Following transitory disruptions in April, including electricity outages in several parts of the province and the federal public servants' strike, May saw rebounds in two sectors, with utilities GDP rising by 1.2% and public administration GDP by 1.5%.
- The following industries, however, posted declines: manufacturing (-0.7%), construction (-1.2 %) and retail trade (-0.9%).
- Looking at Canada as a whole, real GDP was up 0.3% in May. For the first five months of 2023, Canada saw cumulative growth of 2.2% compared to 0.7% for Quebec.
Real GDP didn't grow as much as expected in May, although the effects of temporary factors that affected the economy in April did give way to recoveries in the sectors directly affected. The goods-producing sector continued to slide in May (-0.2%) due to weakness in construction and manufacturing. Over the first five months of the year, goods output shrank 2.0% compared to the same period last year. The services sector grew by 0.2% in May, for cumulative growth of 1.7% since the start of the year.
May's lacklustre GDP gain reflects a sluggish Quebec economy. We can also expect the adverse effects of the forest fires in some parts of the province to start to show up in June's real GDP print. Given the already rough start to the second quarter, a contraction in quarterly GDP may be in the cards. With the economy on shaky ground to begin with, the fallout from natural disasters will be one more obstacle to overcome.
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