Morning coffee and economic indicators

*The Royal Bank says the Canadian economy will shrink by 2.4 per cent this year, due in part to the substantial 5.4 per cent annual GDP contraction in the first quarter.

That's the worst quarterly economic performance since 1991 and likely the worst in the current recession.

*A new forecast by RBC Economics suggests the Ontario economy may contract by 3.4 per cent this year.

The report cites difficulties in the manufacturing sector, weak external demand for Ontario's products and continued job losses.

The RBC report says the "path ahead for the Ontario economy is fraught with uncertainty,'' especially in the automotive and manufacturing sectors.

*Manufacturing sales edged down 0.1 per cent to $41 billion in April.

Statistics Canada reports manufacturing sales leveled off between February and April, after falling by 18.7 per cent between October 2008 and January 2009.

The agency says a 16.4 per cent gain in the transportation equipment industry was offset by weakness in other industries.

Excluding the transportation equipment industry, manufacturing sales decreased 2.8 per cent.

*The number of new motor vehicles sold remained essentially unchanged in April at 121,290, following a strong increase in March.

Statistics Canada reports April sales were eight per cent higher than those reported in December 2008, when new motor vehicles sold were at their lowest level in 10 years.

Preliminary industry data for May indicate that the number of new motor vehicles sold was up about one per cent from April.

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