• Analytics
  • News and Tools
  • Market News
  • Canada: May GDP data show tentative signs of recovery - TD Bank Financial Group
Canada: May GDP data show tentative signs of recovery - TD Bank Financial Group
31.07.2020, 13:41

Canada: May GDP data show tentative signs of recovery - TD Bank Financial Group

According to ActionForex, analysts at TD Bank Financial Group note that the Canadian economy returned to growth in May as real GDP rose 4.5% month-on-month. 

"May’s growth was a fair bit stronger than both Statistics Canada’s initial nowcast of a 3% gain and market expectations of a 3.5% climb. Growth was fairly widespread, as 17 of 20 major sectors reported increased activity."

"Statistics Canada provided an early nowcast for June, forecasting a further 5% climb. This would leave the level of economic activity 10.4% below February’s reading, and implies roughly a 12% drop for the second quarter as a whole, or about -40% annualized." 

"That latter figure is perhaps a less useful way of presenting things given the unique nature of the shock – the notion of a ‘run rate’ implied by an annualized figure isn’t as helpful when the trend has already reversed itself (as implied by the May data and June nowcast). Regardless of how you calculate it, the story is the same: COVID-19 hit the Canadian economy like a wrecking ball."

"Output in the goods producing sectors, which had been hardest hit over March and April, rose 8%, but despite the strong performance, the level of activity was still 15% below February’s reading. Construction stood out, up 17.6% as restrictions on activity were eased in Quebec and Ontario. Manufacturing activity rose 7.4%, with transportation equipment in the driver’s seat as auto plants began to re-open from mid-month."

"In contrast, the much larger service sector rose a more modest 3.3%, and was 14.4% below February levels in May. There were some standout performers: retail trade rose 16.4%, driven by motor vehicle and parts dealers, but with 11 of 12 subsectors expanding, the bigger story appears to have been the re-openings as the month progressed."

"As expected, the May GDP data gave us further confirmation that at least in aggregate, the immediate economic impact of the pandemic is now behind us. A solid nowcast for June, and a combination of further re-openings and encouraging early data for July all point to an ongoing recovery from the earlier hit."

"There is no understating the scale of that hit. Even with May and June set to be the strongest two months of growth recorded under the current definition, the economy was still about 10% shy of its pre-pandemic level of activity in early summer. The June forecast and early July indicators augur for a decent pop-back of activity this quarter, but once the initial effect of re-openings fades, we’re likely to enter a more gradual phase of recovery."

© 2000-2020. All rights reserved.

This site is managed by Teletrade D.J. Limited 20599 IBC 2012 (First Floor, First St. Vincent Bank Ltd Building, James Street, Kingstown, St. Vincent and the Grenadines).

The information on this website is for informational purposes only and does not constitute any investment advice.

AML Website Summary

Risk Disclosure

Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.

Privacy Policy

Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.

Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.

Live Chat E-mail
Choose your language / location