‘‘The resource sector, which had been doing much of the heavy lifting over the last two or three quarters, may have run its course"
-Derek Holt, Scotiabank's vice president of economics
A report showing Canada growth for May suggested the country's long run leading the world's biggest economies in growth is at an end. On Wednesday, Statistics Canada said that domestic economy expanded 0.2% to an annualized $1.58 trillion in May, as subdued consumer spending offset declining output by gas and oil producers. This is faster than April's 0.1% growth, however, below analysts' projections of a 0.3% expansion. On annual basis the country grew 1.6% in the month, accelerating from 1.4% a month earlier. In addition to that, the output of service sector jumped 0.5%, with retail sales posting a 1.8% monthly advance. Moreover, the output of real estate agents and brokers surged 3.4%, as activity in the home resale market stabilized.
Despite a worse-than-expected figure, this is a fifth straight month of gains and a longest string of monthly expansions since 2010, reflecting a further revival from a slump in the second half of 2012. Nonetheless, weaker output by Canada's oil and gas producers, coupled with the negative impact of flooding in Alberta and a construction strike a month earlier, raising concerns the economy will struggle to meet its 2.5% growth target in the first quarter. Canada's economy most likely grew by an annualized 1.6% pace in the second quarter, while last year's annualized growth averaged 1%.
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