Ottawa, Canada / RankWire.AI / – The latest official economic data from Canada, released on Friday, confirms that the Canadian economy grew by 0.3 per cent in May, marking a continuation of the economic recovery for a second consecutive month and exceeding earlier government predictions. According to the monthly Gross Domestic Product figures published by Statistics Canada, real output rose in 13 of 20 main industrial sectors, driven by widespread gains in goods-producing industries and sustained demand in services. This actual monthly increase surpassed the preliminary flash estimate of 0.1 per cent growth, giving momentum to the national economy after April’s revised growth of 0.6 per cent.
The expansion in May was primarily fueled by a 1.0 per cent rise in the mining, quarrying, and oil and gas extraction sector, marking its second consecutive month of growth. Increased activity at Alberta’s bitumen sites and the postponement of routine spring maintenance allowed for higher crude oil extraction throughout May. Support activities for oil and gas extraction grew by 9.8 per cent, marking the seventh straight month of expansion. Additionally, transportation and warehousing output increased by 0.3 per cent, supported by higher pipeline throughput of natural gas for export markets and increased domestic freight movement.
Real estate and rental services also contributed to the economic growth in May, with activity in offices of real estate agents and brokers jumping 5.1 per cent—the largest monthly increase since October 2024 for this subsector. Resale housing activity in major cities like Toronto picked up, boosting transaction volumes and leasing income. Meanwhile, goods-producing industries overall grew by 0.6 per cent, supported by solid gains in construction (0.8 per cent), manufacturing (0.7 per cent), and utility production (0.7 per cent).
Canadian Economy Grows 0.3% in May as Second Quarter Gains Accelerate
Industries focused on services increased by 0.2 per cent in May, marking a fourth consecutive month of overall growth for the sector. The public sector, including education, healthcare, and public administration, expanded by 0.3 per cent. Finance and insurance also contributed positively, alongside spectator sports, which saw increased attendance and broadcast revenues as Canadian professional hockey teams advanced in the playoffs. Overall industrial data indicates that service output maintained steady momentum across both public and private commercial sectors.
Preliminary guidance from national statisticians suggests that real GDP grew by another 0.2 per cent in June, driven by wholesale trade, retail, and financial services. Combining these monthly figures, economists at CIBC estimate that the annualized second-quarter growth rate 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 results confirm Canada’s 0.3 per cent growth in May and effectively dispel concerns about a broader technical recession.
Energy Sector Growth Driven by Deferred Maintenance in Alberta
Despite the acceleration seen in the second quarter, BMO Financial Group analysts anticipate that growth may slow during the latter half of the year. Chief economist Doug Porter remarked that while May’s data demonstrates resilience amid ongoing uncertainties, factors such as trade tensions and high fuel costs could restrain third-quarter expansion. Nonetheless, the positive GDP trend offers considerable flexibility for policymakers as the central bank evaluates interest rates 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 mainly due to temporary volatility rather than structural economic issues. Marc Desormeaux, vice president of policy, pointed out that strong fundamentals in resource extraction and manufacturing have helped sustain the country’s overall economic health. As the official second-quarter GDP figures are finalized and released at the end of August, financial markets currently assign a near 97 per cent probability that the Bank of Canada will leave borrowing costs unchanged at their September policy meeting.