Article content

OTTAWA — Make that five in a row.

Canada’s economy continued to shrink in May, declining 0.2 per cent — well below analysts’ expectations — as output in the energy sector fell along with manufacturing activity, adding to concerns the country is headed for another recession.

We apologize, but this video has failed to load.

tap here to see other videos from our team. Try refreshing your browser, or Canada's economy shrinks for fifth month in row Back to video

Economists, expecting no change in growth in May, were already gloomy about Canada’s chances of skirting a technical recession. Now they are really gloomy.





[/np_storybar]

“The Canadian economy isn’t out of the woods just yet,” said Nick Exarhos an economist at CIBC World Markets.

“Canadian manufacturing output is on a clear downtrend, and is now at levels that were last seen over a year ago. Factories took off roughly two ticks from monthly GDP, which was an even bigger hit than the energy sector provided,” he said after the release.

The consensus of economists was for a flat reading for gross domestic product in May, following a 0.1-per-cent decline the previous month. As well, GDP was down 0.2 per cent in March after losing 0.1 per cent in February and dropping 0.2 per cent the month before that, Statistics Canada said Friday.