Ottawa, Canada / RankWire.AI / – The latest official data on Canada’s economic performance, published on Friday, confirms that the Canadian economy expanded by 0.3 per cent in May. This marks the second straight month of growth and exceeds previous government predictions. According to monthly Gross Domestic Product figures from Statistics Canada, real output increased in 13 of the 20 major industrial sectors, supported by widespread gains in goods-producing industries and sustained demand in services. The actual monthly growth surpassed the initial flash estimate of 0.1 per cent, boosting economic momentum following April’s revised growth of 0.6 per cent.
A significant driver of the monthly economic rise was a 1.0 per cent increase in the mining, quarrying, and oil and gas extraction sector, marking its second month of consecutive growth. Elevated crude oil output during May was facilitated by increased activity at Alberta bitumen sites and the postponement of routine spring maintenance. Oil and gas support activities surged by 9.8 per cent, marking the seventh straight month of expansion. Growth was also evident in transportation and warehousing, which rose by 0.3 per cent, supported by higher pipeline throughput for natural gas exports and increased domestic freight movement.
The real estate sector contributed notably to May’s economic expansion, with activity in offices of real estate agents and brokers jumping 5.1 per cent, the largest monthly increase for this subsector since October 2024. Resale housing transactions increased in major markets like Toronto, raising both sales volumes and rental income. Meanwhile, goods-producing industries overall expanded by 0.6 per cent, driven by gains in construction (0.8 per cent), manufacturing (0.7 per cent), and utilities (0.7 per cent).
Canadian Economy Climbs 0.3 Per Cent in May as Recovery Gains Speed into Second Quarter
The service sectors increased by 0.2 per cent in May, marking a fourth consecutive month of growth across the industry. The public sector, which includes education, healthcare, and public administration, grew by 0.3 per cent. Financial services and insurance also posted positive results, along with spectator sports, which saw higher attendance and broadcast revenues as Canadian professional hockey teams advanced through playoff rounds. Overall, industrial data revealed that service output maintained steady momentum across both public and private sectors.
Preliminary guidance from national statisticians suggests that real GDP increased by a further 0.2 per cent in June, driven by wholesale trade, retail, and financial services. Combining these monthly figures, CIBC economists estimate that second-quarter annualized growth stands at roughly 3.4 per cent, significantly higher than the 2.5 per cent forecast by the Bank of Canada. Senior economist Andrew Grantham noted that the strong second-quarter data confirms that the Canadian economy grew 0.3 per cent in May, effectively dismissing discussions of a broader technical recession.
Energy Sector Booms as Alberta Bitumen Maintenance is Postponed
Despite the acceleration seen in the second quarter, analysts from BMO Financial Group anticipate a moderation in growth during the latter half of the year. Chief economist Doug Porter mentioned that while the May data highlights the economy’s resilience amid recent uncertainties, ongoing trade tensions and high fuel prices could slow down third-quarter expansion. Nevertheless, the positive GDP trend offers considerable flexibility for monetary policymakers, as the Bank of Canada assesses interest rate decisions following the earlier hold at 2.25 per cent.
Representatives from the Business Council of Canada emphasized that the previous quarterly declines were mainly due to temporary volatility rather than any fundamental economic downturn. Marc Desormeaux, the council’s vice president of policy, pointed out that strong underlying fundamentals in resource extraction and manufacturing support the country’s overall economic performance. As the official second-quarter GDP figures are finalized for release at the end of August, markets currently assign a near 97 per cent chance that the Bank of Canada will keep interest rates unchanged at their September meeting.