National Bank of Canada’s analyst, Krishen Rangasamy  point out that May’s GDP results in Canada were better than expected, with solid headline growth and broad based gains and noted that the dispersion of output gains was actually the best since 2004. 

Key Quotes:

“Canada’s real GDP rose 0.5% in May, the biggest monthly increase since July 2016. Consensus was expecting just a +0.3% growth print.”

“Of the 20 broad industrial sectors, 19 registered increases in output, the best dispersion since 2004.”

“The only sector seeing a decline was utilities, although a giveback was always in the cards there after colder-than-normal temperatures had boosted the prior month’s output.”

“ Sectors that were adversely affected by inclement weather the prior month such as construction, retailing, arts/recreation and accommodation/food services, all saw rebounds.

“May’s output surge puts Q2 GDP on track to grow around 3% annualized (even assuming no change in June), not far from the Bank of Canada’s 2.8% estimate for the quarter.”