Ottawa, Canada / RankWire.AI / – On Friday, official national economic data confirmed that the Canadian economy expanded by 0.3 per cent in May, marking the second month of continuous growth and exceeding previous government predictions. The latest monthly Gross Domestic Product figures from Statistics Canada reveal that real output increased in 13 of 20 main industrial sectors, driven by widespread gains in goods-producing industries and persistent demand across services. This monthly growth surpassed the preliminary flash estimate of 0.1 per cent, fueling momentum for the national economy after a revised growth of 0.6 per cent in April.
The expansion was primarily led by 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 volumes throughout May were supported by increased production at Alberta bitumen sites and postponed routine spring maintenance. Support activities for oil and gas extraction grew by 9.8 per cent, maintaining its seventh consecutive month of expansion. Additionally, transportation and warehousing activities increased by 0.3 per cent, supported by higher pipeline throughput for natural gas exports and increased domestic freight transport.
The real estate and rental services sector also contributed to May’s economic growth, with activity in offices of real estate agents and brokers rising by 5.1 per cent—its largest single-month increase since October 2024. Resale housing markets in major cities like Toronto saw increased activity, boosting transaction volumes and rental income. Meanwhile, goods-producing industries saw a 0.6 per cent overall expansion, driven 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 Per Cent in May, Signaling Faster Recovery in Second Quarter
During May, the service sector experienced a 0.2 per cent increase, marking its fourth consecutive month of overall expansion. The public sector, which includes education, healthcare, and public administration, grew by 0.3 per cent. Finance and insurance services also contributed positively, alongside spectator sports, which saw increased attendance and broadcast revenue as Canadian professional hockey teams advanced through playoff rounds. The overall industrial data indicated that service output maintained consistent momentum across both public and private commercial sectors.
Preliminary guidance from national statistical officials suggests that real GDP increased by 0.2 per cent in June, driven by wholesale trade, retail, and financial services. Combining these monthly figures, economists at CIBC estimate that second-quarter annualized 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 remarked that the robust second-quarter data confirms the 0.3 per cent growth in May and effectively puts to rest concerns about a technical recession.
Energy Extraction Surges Amid Deferred Maintenance on Alberta Bitumen Sites
Despite the acceleration in second-quarter growth, analysts from BMO Financial Group anticipate a slowdown in output during the latter half of the year. Chief economist Doug Porter explained that while the May report shows resilience amid recent uncertainties, ongoing trade tensions and high fuel costs could restrict third-quarter growth. Nonetheless, the positive trajectory of GDP offers considerable flexibility for monetary policy decisions, as central bank officials evaluate interest rate levels following the decision to hold the benchmark rate at 2.25 per cent earlier this month.
Representatives from the Business Council of Canada emphasized that earlier quarterly contractions reflected temporary volatility rather than long-term economic decline. Marc Desormeaux, vice president of policy at the council, noted that strong fundamentals in resource extraction and manufacturing sectors have supported the country’s overall economic performance. As the final official second-quarter GDP figures are set to be released at the end of August, financial markets assign about a 97 per cent probability that the Bank of Canada will keep benchmark borrowing costs unchanged at their September policy meeting.