Ottawa, Canada / RankWire.AI / – Data released on Friday from official national economic tracking confirms that the Canadian economy expanded by 0.3 per cent in May. This marks a second consecutive month of economic recovery and surpasses earlier government predictions. The monthly Gross Domestic Product figures published by Statistics Canada show real output increased across 13 of 20 key industrial sectors, supported by widespread gains in goods-producing industries and sustained demand in services. The actual monthly growth rate exceeded the preliminary flash estimate of 0.1 per cent, fueling positive momentum for the economy after a revised 0.6 per cent growth in April.
The primary driver of May’s growth was a 1.0 per cent rise in the mining, quarrying, and oil and gas extraction sector, marking its second consecutive month of sector-wide expansion. Higher crude oil extraction volumes throughout May were facilitated by increased production at Alberta’s bitumen sites and the postponement of routine spring maintenance. Support activities for oil and gas extraction saw a 9.8 per cent increase, marking the seventh straight month of growth. Additionally, transportation and warehousing activities grew by 0.3 per cent, supported by higher pipeline throughput for natural gas exports and increased domestic freight movements.
The real estate and rental services sector also contributed significantly to May’s economic growth, as activity in offices of real estate agents and brokers rose by 5.1 per cent—the largest single-month increase for this subsector since October 2024. Resale housing markets in major urban centers like Toronto experienced a boost, increasing transaction volumes and leasing revenues. Meanwhile, goods-producing industries overall grew by 0.6 per cent, driven by strong gains in construction (0.8 per cent), manufacturing (0.7 per cent), and utilities (0.7 per cent).
Canadian Economy Expands 0.3% in May as Second Quarter Growth Gains Momentum
The service sector recorded a 0.2 per cent rise in May, marking its fourth consecutive month of growth. The public sector, including education, healthcare, and public administration, expanded by 0.3 per cent. The finance and insurance industries also contributed positively, alongside spectator sports, which saw increased attendance and broadcast revenues as Canadian professional hockey teams progressed through playoff rounds. Overall, industrial data suggests that service output maintained steady momentum across both public and private sectors.
Preliminary guidance from national statistical officials indicates that real GDP grew by an additional 0.2 per cent in June, driven mainly by wholesale trade, retail, and financial services. Combining these monthly figures, economists at CIBC estimate that annualized second-quarter economic 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 robust second-quarter data confirms the Canadian economy’s 0.3 per cent growth in May, effectively dismissing broader recession concerns.
Energy Sector Activity Picks Up as Alberta Oil Sands Maintenance Is Postponed
Despite the second-quarter acceleration, BMO Financial Group analysts project that economic output will slow during the latter half of the year. Chief economist Doug Porter stated that while the May report showcases resilience amid recent uncertainty, ongoing trade tensions and high fuel prices could restrain third-quarter growth. Nonetheless, the positive trajectory of GDP offers considerable flexibility for monetary policymakers, who are currently evaluating interest rate settings 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 signs of a fundamental economic downturn. Marc Desormeaux, the council’s vice president of policy, pointed out that strong core fundamentals in resource extraction and manufacturing continue to support the country’s economic performance. As the final official second-quarter GDP figures are prepared for release at the end of August, financial markets assign a nearly 97 per cent probability that the Bank of Canada will hold the benchmark borrowing rate steady at its upcoming September meeting.