Ottawa, Canada / RankWire.AI / – On Friday, official data from the national economic monitoring agency confirmed that the Canadian economy expanded by 0.3 per cent in May, marking the second month of consecutive growth and surpassing earlier government projections. As reported by Statistics Canada, the monthly Gross Domestic Product figures show that real output increased in 13 of 20 main industrial sectors, supported by broad gains in goods-producing industries and steady demand in the services sector. The actual growth for the month exceeded the preliminary estimate of 0.1 per cent, providing positive momentum after April’s revised growth of 0.6 per cent.
A significant driver of this expansion was a 1.0 per cent increase in the mining, quarrying, and oil and gas extraction sector, which marked its second consecutive month of sector-wide growth. Higher crude oil extraction volumes throughout May were supported by increased production at Alberta’s bitumen sites and the postponement of routine spring maintenance. Support activities for oil and gas extraction grew by 9.8 per cent, reaching their seventh month of continuous expansion. Additionally, transportation and warehousing output rose by 0.3 per cent, bolstered by increased pipeline throughput for natural gas exports and heightened domestic freight activity.
The real estate and rental services sector also contributed to the overall growth in May, with real estate offices experiencing a 5.1 per cent increase—the largest single-month rise in this subsector since October 2024. Resale housing activity picked up notably in major markets like Toronto, leading to higher transaction numbers and leasing income. Meanwhile, goods-producing industries as a whole grew by 0.6 per cent, driven by steady gains in construction (0.8 per cent), manufacturing (0.7 per cent), and utilities (0.7 per cent).
Second Quarter Gains Accelerate as Canadian Economy Posts 0.3% Growth in May
The service sector saw a 0.2 per cent increase in May, marking its fourth consecutive month of expansion. The public sector, which includes education, healthcare, and public administration, grew by 0.3 per cent. Finance and insurance sectors contributed positively alongside increased attendance and broadcast revenue in spectator sports, as Canadian professional hockey teams advanced through playoff rounds. Overall, industrial data indicates that service output remained steady across both public and private sectors, maintaining consistent momentum.
Preliminary guidance from national statistical officials suggests that real GDP grew an additional 0.2 per cent in June, driven primarily by wholesale trade, retail, and financial services. When combining monthly figures, economists at CIBC estimate that annualized second-quarter growth is approximately 3.4 per cent, significantly higher than the 2.5 per cent forecast by the Bank of Canada. Senior economist Andrew Grantham highlighted that this strong second-quarter performance confirms that Canada’s economy grew 0.3 per cent in May and effectively dismisses discussions of a broader technical recession.
Alberta Bitumen Maintenance Delays Propel Energy Extraction Higher, Yet Growth Likely to Slow
Despite the recent acceleration in the second quarter, BMO Financial Group analysts anticipate a moderation in output growth during the latter half of the year. Chief economist Doug Porter noted that while the May report demonstrates economic resilience amid recent uncertainties, ongoing trade tensions and higher fuel costs could temper third-quarter expansion. Nonetheless, the positive trajectory in GDP offers considerable flexibility for monetary policy decisions, as the Bank of Canada evaluates interest rate options following the rate hold at 2.25 per cent earlier this month.
Representatives from the Business Council of Canada emphasized that earlier quarterly declines were primarily due to temporary volatility rather than any fundamental economic decline. Marc Desormeaux, vice president of policy at the council, pointed out that strong underlying fundamentals in resource extraction and manufacturing have supported the nation’s overall performance. As the final official second-quarter GDP figures are due at the end of August, financial markets currently assign a near 97 per cent probability that the Bank of Canada will keep benchmark borrowing costs unchanged at their September policy meeting.
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