Canada Recorded Economic Growth of 0.3%, But Can This Momentum Be Carried Into June!

<p>&nbsp;Canada's economy grew by 0.3% in May, in line with expectations, as demand for services outpaced slower growth in the energy sector, according to Statistics Canada data released on Friday.</p><p><br /></p><p>Analysts polled by Reuters had forecast a 0.3% increase in May. April GDP was updated to 0.1% growth from an earlier report that showed no growth. However, GDP value is expected to decrease by 0.2% in June, showing an annual growth rate of 1% in the second quarter, based on Statistics Canada's flash estimate.</p><p><br /></p><p>The Bank of Canada has forecast annual GDP growth of 1.5% in the quarter ending in June. The central bank said in early July that demand for services and a tightening in the labor sector were among the factors driving the economy, as it raised its GDP growth forecast for this year.</p><p><br /></p><p><br /></p><p>A recovery in the wholesale and public administration sectors, as well as increases in the manufacturing and real estate sectors, helped drive economic growth in May, according to a statement from Statistics Canada. The manufacturing sector posted its biggest increase since October 2021, with both durable and non-durable goods manufacturing increasing.</p><p><br /></p><p>The increase helped outpace the largest decline in the energy sector since August 2020. Canada's energy sector has been seriously affected by wildfires in the province of Alberta, which is a major oil-producing region.</p><p><br /></p><p>Oil and gas extraction, excluding oil cluster areas, decreased by 6.6% due to wildfires in Alberta, according to Statistics Canada. Overall, Canada's services sector expanded by 0.5% in May, while the goods-producing sector contracted by 0.3%.</p>