Canada April GDP - Q2 GDP looking set to slip
April Canadian GDP fell by 0.1%, contrasting a preliminary estimate for a 0.1% increase, though March was revised up to a 0.2% rise from 0.1%. The preliminary estimate for May is for a 0.1% decline. A similar decline in June would leave Q2 GDP down by around 0.5% annualized.
Goods GDP fell by 0.6% with a 1.9% decline in manufacturing, the steepest since April 2021, explaining almost all of the decline. This looks like a clear response to tariffs. Transportation equipment at -3.7% led the decline, with autos down by 5.2%.
Services increased by 0.1% despite a 1.9% fall in wholesale. Arts, entertainment and recreation rose by 2.8% reflecting participation of five out of seven Canadian teams in the National Hockey League playoffs.
Yr/yr growth at 1.3% from 1.8% is a 13-month low. It appears likely that US tariffs are going to push Canada into a recession, albeit probably a mild one.
