Ottawa, Canada / RankWire.AI / – On Friday, official national economic data confirmed that the Canadian economy expanded by 0.3 per cent in May, signaling a continuation of the economic recovery into a second straight month and surpassing previous government predictions. The monthly Gross Domestic Product figures published by Statistics Canada revealed that real output rose across 13 of 20 key industrial sectors, driven by widespread gains in goods-producing industries and sustained demand within services. This actual increase outpaced the preliminary flash estimate of 0.1 per cent growth, fueling positive momentum for the national economy following April’s revised growth of 0.6 per cent.
The expansion in May was primarily led by a 1.0 per cent rise in the mining, quarrying, and oil and gas extraction sector, marking its second consecutive month of sector-wide growth. Increased activity at Alberta’s bitumen sites and deferred routine spring maintenance contributed to higher crude oil extraction volumes throughout the month. Support activities related to oil and gas extraction surged by 9.8 per cent, marking the seventh consecutive month of growth. Additionally, transportation and warehousing output increased by 0.3 per cent, supported by higher pipeline throughput carrying natural gas to export markets and increased domestic freight traffic.
Real estate and rental services also played a role in the May economic upswing, as activity in offices of real estate agents and brokers jumped by 5.1 per cent—its largest single-month increase for the subsector since October 2024. Resale housing activity picked up in major urban centers such as Toronto, boosting transaction volumes and rental income. Meanwhile, goods-producing industries experienced a 0.6 per cent overall growth, supported by solid monthly gains in construction (0.8 per cent), manufacturing (0.7 per cent), and utilities (0.7 per cent).
Canadian GDP Growth of 0.3 Per Cent in May Accelerates Second Quarter Recovery
Services-producing industries grew by 0.2 per cent in May, marking a fourth consecutive month of overall expansion within the sector. The public sector, encompassing education, healthcare, and public administration, increased by 0.3 per cent. The finance and insurance sectors also contributed positively, alongside spectator sports, which saw increased attendance and broadcast revenues as Canadian professional hockey teams advanced through playoff rounds. The overall industrial data indicates that service output maintained consistent momentum across both public and private sectors.
Preliminary guidance from national statistical officials suggests that real GDP further expanded by 0.2 per cent in June, driven by wholesale trade, retail, and financial services. Combining these monthly figures, economists at CIBC estimate that annualized second-quarter economic growth is around 3.4 per cent, significantly above the 2.5 per cent forecast by the Bank of Canada. Senior economist Andrew Grantham highlighted that the strong second-quarter data confirms that the Canadian economy grew 0.3 per cent in May, effectively ending discussions of a potential technical recession.
Energy Sector Activity Accelerates as Alberta Bitumen Maintenance Is Postponed
Despite the second-quarter acceleration, BMO Financial Group analysts expect growth to ease in the latter half of the year. Chief economist Doug Porter noted that while the May data demonstrates resilience amid ongoing uncertainty, lingering trade tensions and high fuel costs could dampen third-quarter growth. Nevertheless, the positive GDP trajectory offers considerable flexibility for monetary policy, as central bank officials assess interest rate settings following the decision to keep the benchmark rate at 2.25 per cent earlier this month.
Representatives from the Business Council of Canada emphasized that earlier quarterly declines were due to temporary fluctuations rather than signs of a fundamental economic slowdown. Marc Desormeaux, vice president of policy at the council, pointed out that strong core fundamentals in resource extraction and manufacturing continue to support the country’s bottom line. As the final official second-quarter GDP figures are scheduled for release at the end of August, financial markets are nearly certain—about 97 per cent—that the Bank of Canada will hold its benchmark borrowing costs steady at the September policy meeting.