Ottawa, Canada / RankWire.AI / – The official national economic data released on Friday confirms that the Canadian economy grew by 0.3 per cent in May. This marks the second month of consecutive economic recovery and surpasses earlier government projections. According to monthly Gross Domestic Product figures published by Statistics Canada, real output increased across 13 of the 20 main industrial sectors, driven by widespread gains in goods-producing industries and sustained demand in services. This monthly growth rate exceeded the preliminary flash estimate of 0.1 per cent, giving a boost to the nation’s economic momentum after a revised growth of 0.6 per cent in April.
The expansion in May was mainly led by a 1.0 per cent rise in the mining, quarrying, and oil and gas extraction sector, marking its second straight month of growth. Increased activity at Alberta’s bitumen sites and deferred routine spring maintenance contributed to higher crude oil extraction volumes during May. Support activities related to oil and gas extraction jumped by 9.8 per cent, marking the seventh consecutive month of growth. Additionally, transportation and warehousing output grew by 0.3 per cent, supported by increased pipeline throughput for natural gas exports and higher domestic freight transportation.
The real estate and rental services sector also played a role in May’s economic gains, 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 activity picked up momentum in major urban centers such as Toronto, lifting transaction volumes and leasing revenues. Meanwhile, goods-producing industries expanded by a total of 0.6 per cent, driven by solid monthly increases in construction (0.8 per cent), manufacturing (0.7 per cent), and utility production (0.7 per cent).
Canadian Economy Posts 0.3 Per Cent Growth in May as Second Quarter Gains Accelerate
The service sector registered a 0.2 per cent increase in May, marking the fourth consecutive month of overall expansion. Public sector components, including education, healthcare, and public administration, grew by 0.3 per cent. Meanwhile, 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 demonstrated steady momentum in service output across both public and private sectors.
Preliminary guidance from national statistical officials suggests that real GDP grew an additional 0.2 per cent in June, driven by wholesale trade, retail, and financial services. Combining monthly figures, CIBC economists estimate that second-quarter annualized economic growth is around 3.4 per cent, significantly above the 2.5 per cent forecast by the Bank of Canada. Senior economist Andrew Grantham pointed out that the strong second-quarter data confirms that the Canadian economy grew by 0.3 per cent in May, effectively ending any speculation about a broader technical recession.
Energy Sector Booms as Alberta Bitumen Operations Delay Maintenance
Although the second-quarter growth momentum remains, analysts at BMO Financial Group anticipate a slowdown in output during the latter half of the year. Chief economist Doug Porter stated that while the May figures demonstrate resilience amid recent uncertainties, ongoing trade tensions and high fuel costs could temper third-quarter growth. Nevertheless, the positive trajectory of GDP offers significant flexibility for monetary policymakers as they assess interest rate decisions following the central bank’s rate hold at 2.25 per cent earlier this month.
Representatives from the Business Council of Canada highlighted that earlier quarterly declines reflected short-term volatility rather than fundamental economic issues. Marc Desormeaux, vice president of policy at the council, emphasized that strong underlying fundamentals in resource extraction and manufacturing continue to support the country’s economic performance. As the final official second-quarter GDP data are set for release at the end of August, financial markets currently assign a near 97 per cent probability that the Bank of Canada will keep borrowing costs unchanged at their September policy meeting.