Canada’s gross domestic product fell by 0.1 per cent in April, following a 0.2 per cent drop in March, which has been primarily driven by a slump in manufacturing.
According to Statistics Canada, the “goods-producing industries were down 0.6 per cent in April, with the manufacturing sector accounting for nearly all the decline.”
Canada’s manufacturing sector GDP dropped by 1.9 per cent in April, marking the largest decline in four years.
Durable goods manufacturing fell by 2.2 per cent, dropping for the first time in four months, with eight out of 10 subsectors contracting.
The transportation equipment manufacturing subsector also saw a 3.7 per cent decline, the largest monthly contraction since September 2021, when the COVID-19 pandemic disrupted global supply chains.
April’s decline was largely attributed to a drop in other transportation equipment, which was down by 21.6 per cent.
This coincided with reduced exports of passenger cars and light trucks as some motor vehicle manufacturers scaled back production in response to U.S. tariff uncertainty.
Non-durable goods manufacturing also fell by 1.6 per cent, with the food, petroleum and coal manufacturing subsectors seeing the largest declines.
“Food manufacturing decreased 3.6 per cent, posting its largest monthly decline since May 2023, as lower production in most industries weighed on the subsector,” said the Statistics Canada report.
“Petroleum and coal product manufacturing dropped 5.9 per cent in April, its largest contraction since April 2021, as many refineries and other petroleum products producers undertook turnaround and maintenance in the month.”
However, the mining, quarrying and oil and gas extraction sectors remained relatively unchanged.
On a positive note, the services-producing industries ticked up by 0.1 per cent in April.
This was brought on by an increase in public administration, finance and insurance, the arts, entertainment and recreation sector.
The public administration sector contributed the most to the increase due to the federal election, increasing by 2.2 per cent in April.
Meanwhile, the entertainment sector was up as a result of five Canadian National Hockey League teams entering the playoffs for the first time since 2017.
This resulted in “higher than usual attendance levels at the arenas in April” and contributed to increased activity in spectator sports.