GDP: Petro-Rebound Conceals Underlying Problems

The main story in today’s GDP numbers is that the oil, gas and mining industries rebounded sharply in April after being hobbled by temporary maintenance and production difficulties in February and March. While the upswing in fossil-fuel and mineral extraction was large enough to boost the overall economy, other key sectors showed signs of weakness.

Manufacturing looked like a bright spot in recent months. However, Statistics Canada’s revision of previous months revealed a more mixed picture and manufacturing declined in April. Construction, another previous driver of economic growth, also turned negative in April.

Today’s revised figures indicate that public administration has been shrinking for seven consecutive months. Government austerity is already imposing a measurable drag on Canada’s economy.

Erin Weir is an economist with the United Steelworkers union and a CCPA research associate.

UPDATE (June 30): Quoted in The Globe and Mail online

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