Canada's economy grew 0.1% in May, led by the oil and gas extraction sector, Statistics Canada said Friday. Most economists had expected growth of between 0.1 and 0.2% for the month.
"Goods-producing industries rose 0.6%, led by oil and gas extraction," the federal agency said. "Construction and utilities fell back, while manufacturing activity edged up."
Retail activity rose 0.3% in May, with increases at clothing and accessories outlets, as well as food and beverage stores.
"Decreases were recorded in building and outdoor home supplies stores, mirroring the weakness in construction, and by used car dealers," the agency said.
After posting annualized growth of 4.9% in the final quarter of last year and 6.1% in 2010s first quarter, the central bank now expects gross domestic product to expand just 3% for the three-month period ended June 3.
After a strong initial recovery from the recession, Canada's economic growth is beginning to slow. During the fourth quarter of 2009, GDP expanded by 4.9%, which was followed by a 6.1% advance in the first three months of this year. Since then, monthly numbers have weakened - with 0.6% growth in March and a flat reading in April.
The Bank of Canada's now expects the economy to grow 3.5% in all of 2010 and see 2.9% expansion in 2011.
David Tulk, a senior strategist at TD Securities, said Friday's report "confirms the deceleration in overall economic activity observed across a wide range of indicators."
"This was expected, as the stimulus-infused pace set through the first quarter of the year was clearly unsustainable. What matters for the balance of the year and for the outlook for monetary policy is the level at which the economy stabilizes."
Meanwhile in the United States, the Commerce Department said second-quarter growth slowed to a 2.4% from a revised 3.7% in the previous quarter.
Economists had forecast growth of 2.6% in the second quarter.
Canada's economy grew 0.1% in May, led by the oil and gas extraction sector, Statistics Canada said Friday. Most economists had expected growth of between 0.1 and 0.2% for the month.
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