Ottawa, Canada / RankWire.AI / – The latest official data from Statistics Canada confirms that the Canadian economy grew by 0.3 per cent in May, marking a second consecutive month of expansion and exceeding prior government estimates. According to monthly Gross Domestic Product figures, real output increased in 13 of 20 key industrial sectors, fueled by widespread growth in goods-producing industries and persistent demand within services. This monthly growth surpassed the preliminary flash estimate of 0.1 per cent, giving the economy additional momentum following a revised April growth rate of 0.6 per cent.
The main driver behind the May expansion was a 1.0 per cent increase in the mining, quarrying, and oil and gas extraction sector, marking its second consecutive month of growth. Higher crude oil extraction throughout May was supported by increased activity at Alberta bitumen sites and delayed routine spring maintenance. Support activities related to oil and gas extraction also rose sharply by 9.8 per cent, extending their seventh straight month of growth. In addition, transportation and warehousing output grew by 0.3 per cent, supported by increased pipeline throughput for natural gas exports and higher domestic freight activity.
The real estate and rental services sector also contributed to the economic gains in May. Offices of real estate agents and brokers saw activity jump 5.1 per cent, the largest monthly increase for this subsector since October 2024. Resale housing activity gained momentum in major markets such as Toronto, boosting transaction numbers and leasing income. Meanwhile, 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 Posts 0.3 Per Cent Growth in May, Accelerating Second Quarter Recovery
Services sectors increased by 0.2 per cent in May, marking their fourth consecutive month of growth. The public sector, including education, healthcare, and public administration, expanded by 0.3 per cent. Additionally, finance and insurance sectors contributed positively, alongside spectator sports, which saw increased attendance and broadcast revenues as Canadian professional hockey teams advanced through playoff rounds. Overall industrial data indicates that service output maintained steady momentum across both public and private sectors.
Preliminary guidance from national statistical officials suggests that real GDP grew by an additional 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 growth is approximately 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 the Canadian economy grew 0.3 per cent in May and effectively quashes discussions of a broader technical recession.
Energy Sector Growth Driven by Deferred Maintenance on Alberta Bitumen Sites
Despite the robust second-quarter performance, analysts at BMO Financial Group anticipate a moderation in economic output during the latter half of the year. Chief economist Doug Porter noted that while May’s data demonstrates resilience amid recent uncertainties, ongoing trade tensions and high fuel prices could limit third-quarter growth. Nonetheless, this positive GDP trend affords policymakers considerable flexibility as they consider interest rate decisions after the benchmark rate was maintained at 2.25 per cent earlier this month.
Representatives from the Business Council of Canada emphasized that previous quarterly declines were mainly due to temporary volatility rather than fundamental economic weakness. Marc Desormeaux, the council’s vice president of policy, pointed out that strong underlying fundamentals in resource extraction and manufacturing continue to support the country’s overall economic performance. As the final official second-quarter GDP figures are prepared for release at the end of August, financial markets estimate a near 97 per cent probability that the Bank of Canada will keep borrowing costs unchanged at their September policy meeting.