Ottawa, Canada / RankWire.AI / – On Friday, the latest official economic data from Canada confirmed that the Canadian economy expanded by 0.3 per cent in May. This marks a continuation of the broader economic recovery, now in its second month, and exceeds previous government forecasts. The monthly Gross Domestic Product figures published by Statistics Canada reveal that real output grew across 13 of the 20 main industrial sectors, buoyed by widespread gains in goods-producing industries and sustained demand in services. Notably, this actual increase in monthly output was higher than the initial flash estimate of 0.1 per cent growth, adding positive momentum to the national economy following April’s revised growth rate of 0.6 per cent.
The expansion was largely driven by a 1.0 per cent rise in the mining, quarrying, and oil and gas extraction sector, marking its second consecutive month of growth. The increased activity across Alberta’s bitumen operations and the postponement of routine spring maintenance allowed for higher crude oil extraction volumes throughout May. Support services for oil and gas extraction also jumped by 9.8 per cent, marking the sector’s seventh month of consecutive growth. Additionally, transportation and warehousing saw a 0.3 per cent increase, supported by higher pipeline throughput transporting natural gas for export and increased domestic freight movement.
The real estate and rental services sector contributed significantly to May’s economic upswing, with activity in offices of real estate agents and brokers climbing by 5.1 per cent—the largest single-month increase for this subsector since October 2024. Resale housing markets in major cities like Toronto experienced a revival, boosting transaction volumes and rental revenues. Meanwhile, industries involved in goods production overall grew by 0.6 per cent, supported by solid gains in construction (0.8 per cent), manufacturing (0.7 per cent), and utilities (0.7 per cent).
Canadian Economic Growth Accelerates to 0.3 Per Cent in May, Signaling Second Quarter’s Upward Momentum
Industries focused on services recorded a 0.2 per cent increase in May, marking their fourth straight month of growth. The combined public sector—covering areas such as education, healthcare, and public administration—expanded by 0.3 per cent. The finance and insurance sectors also made positive contributions, alongside increased activity in spectator sports, which benefited from higher attendance and broadcast revenues as Canadian professional hockey teams advanced through playoff rounds. The overall industrial data indicates that service sector output maintained steady momentum across both public and private commercial sectors.
Preliminary estimates from national statistical officials suggest that real GDP expanded by a further 0.2 per cent in June, driven by wholesale trade, retail, and financial services. When combining the monthly output figures, economists at CIBC project that the annualized growth for the second quarter is approximately 3.4 per cent, notably above the 2.5 per cent forecast from the Bank of Canada. Senior economist Andrew Grantham highlighted that the strong second-quarter data affirms the 0.3 per cent growth in May and effectively puts an end to discussions about a broader technical recession.
Energy Sector Boosts Output as Alberta’s Bitumen Maintenance is Postponed
Despite the acceleration seen in the second quarter, analysts at BMO Financial Group anticipate a slowdown in growth during the latter half of the year. Chief economist Doug Porter explained that while the May report demonstrates economic resilience amid recent uncertainties, ongoing trade tensions and high fuel prices could temper third-quarter expansion. Nevertheless, the positive trajectory of GDP growth provides considerable flexibility for monetary policy decisions, as Bank of Canada officials consider whether to hold interest rates steady after the benchmark rate remained at 2.25 per cent earlier this month.
Representatives from the Business Council of Canada emphasized that earlier quarterly contractions were mainly due to temporary volatility rather than fundamental economic decline. Marc Desormeaux, vice president of policy at the council, noted that the robust underlying fundamentals in resource extraction and manufacturing continue to support the country’s bottom line. 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 keep benchmark borrowing costs unchanged at their upcoming September meeting.