Canada’s economy hit a soft patch in April, with Statistics Canada reporting Friday that real gross domestic product (GDP) edged down 0.1% for the month driven almost entirely by a slowdown in the manufacturing sector.
The April pullback came as goods-producing industries shrank by 0.6%, weighed down by a 1.9% plunge in manufacturing output—the sector’s biggest monthly drop since April 2021.
The agency’s early estimate suggests another 0.1% contraction in economic activity for the month of May.
Within manufacturing, both durable and non-durable goods took a hit. Durable goods manufacturing, which includes products like cars and appliances, was down 2.2%, while non-durable goods dropped 1.6%.
On the other side of the ledger, services-producing industries eked out a modest 0.1% gain, offering a bit of a cushion to the overall economy.
The back-to-back declines raise fresh concerns about the strength of Canada’s economic momentum heading into the summer and may factor into the Bank of Canada's next move on interest rates.