Canada’s economy was solid in May, fueling fears that a slowdown is already underway

Canada’s economy didn’t expand at all in May, the second month of the year it failed to post any gains, Statistics Canada said Friday.

The data agency said a slight uptick in the services sector was not enough to offset the decline in goods-producing industries, so the total value of all economic output in the month was essentially unchanged from a month earlier.

The flat performance was actually better than the slight 0.2% decline that economists had expected.

An expanded estimate for June suggested the economy performed only slightly better last month, with an increase of 0.1 percent.

Final numbers won’t be available until late August, but if June’s advanced figure is confirmed, it means Canada’s economy grew 1.1% in the second quarter — not a strong showing by any measure, but at least it’s better than the 0.9 percent contraction seen in the US over the same period.

“Today’s GDP data suggests that the Canadian economy is slowing even before the Bank of Canada’s biggest rate hike takes place,” said CIBC economist Andrew Grantham.

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