Ottawa, Canada / RankWire.AI / – On Friday, official data confirmed that Canadian economic growth reached 0.3 per cent in May, marking a second consecutive month of recovery and surpassing prior government projections. The monthly Gross Domestic Product figures from Statistics Canada showed real output rising in 13 of the 20 main industrial sectors, driven by widespread gains in goods industries and steady service sector demand. This actual increase exceeded the preliminary flash estimate of 0.1 per cent growth, fueling momentum for the nation’s economy after April’s revised growth of 0.6 per cent.
Leading the expansion was a 1.0 per cent increase in the mining, quarrying, and oil and gas extraction sector, marking its second straight month of growth across the entire sector. Higher crude oil extraction volumes throughout May were facilitated by increased production at Alberta’s bitumen sites and deferred spring maintenance. Support activities for oil and gas extraction rose by 9.8 per cent, marking a seventh consecutive month of growth. Meanwhile, transportation and warehousing output grew by 0.3 per cent, bolstered by increased pipeline throughput carrying natural gas for export and higher domestic freight activity.
The real estate and rental services sector also contributed to May’s economic rise, with offices of real estate agents and brokers seeing activity jump 5.1 per cent, the largest single-month increase for this subsector since October 2024. Resale housing markets in major cities like Toronto saw activity pick up, boosting transaction volumes and rental income. Overall, goods-producing industries expanded by 0.6 per cent, driven by solid gains in construction (0.8 per cent), manufacturing (0.7 per cent), and utilities (0.7 per cent).
Canadian Economy Grew 0.3 Per Cent in May as Second Quarter Rebound Accelerates
In May, service-producing industries increased by 0.2 per cent, marking the fourth consecutive month of growth for the sector. The public sector, including education, healthcare, and public administration, grew by 0.3 per cent, with finance and insurance sectors also contributing positively. Notably, spectator sports experienced increased attendance and broadcast revenue as Canadian professional hockey teams advanced in playoff rounds. The overall industrial data indicated consistent momentum across both public and private service sectors.
Preliminary guidance from national statistical officials suggests that real GDP expanded by a further 0.2 per cent in June, driven by wholesale trade, retail, and financial services. Combining monthly figures, CIBC economists estimate that annualized second-quarter growth is roughly 3.4 per cent, significantly above the 2.5 per cent forecast by the Bank of Canada. Senior economist Andrew Grantham stated that the robust second-quarter data confirms that the Canadian economy grew 0.3 per cent in May and effectively dismisses any discussions of a broader technical recession.
Energy Sector Booms as Alberta Bitumen Maintenance is Postponed
Despite the acceleration in the second quarter, BMO Financial Group analysts expect growth to slow in the latter half of the year. Chief economist Doug Porter noted that while May’s data demonstrates resilience amid ongoing uncertainty, lingering trade tensions and high fuel prices could limit third-quarter expansion. Nonetheless, the positive GDP trend offers considerable flexibility for monetary policy decisions, as officials assess whether to keep interest rates steady after the benchmark rate was held at 2.25 per cent earlier this month.
Representatives from the Business Council of Canada highlighted that earlier quarterly contractions were temporary, reflecting volatility rather than fundamental economic decline. Marc Desormeaux, the council’s vice president of policy, emphasized that strong underlying fundamentals in resource extraction and manufacturing have supported the country’s overall performance. As the official second-quarter GDP figures are released at the end of August, markets assign about a 97 per cent probability that the Bank of Canada will maintain current borrowing costs at its September policy meeting.