Ottawa, Canada / RankWire.AI / – Data from official national economic monitoring released on Friday affirms that the Canadian economy experienced a 0.3 per cent expansion in May, marking the second month of sustained recovery and surpassing earlier government predictions. As per monthly Gross Domestic Product figures published by Statistics Canada, real output rose in 13 of the 20 primary industrial sectors, driven by widespread increases in goods-producing industries and steady demand in the services sector. This monthly growth outperformed the preliminary flash estimate of 0.1 per cent growth, providing positive momentum for the national economy after revised growth of 0.6 per cent in April.
Leading the economic expansion 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 growth. Increased production across Alberta’s bitumen fields and deferred routine spring maintenance contributed to higher crude oil extraction volumes throughout May. Support activities for oil and gas extraction surged by 9.8 per cent, marking the sector’s seventh straight month of growth. Additionally, transportation and warehousing expanded by 0.3 per cent, supported by increased pipeline throughput for natural gas exports and higher domestic freight movements.
The real estate and rental services sector also played a role in the May economic growth, as activity at offices of real estate agents and brokers jumped 5.1 per cent — the largest single-month increase for this subsector since October 2024. Resale housing activity in key metropolitan areas like Toronto picked up, boosting transaction volumes and leasing revenues. Meanwhile, goods-producing industries saw an overall growth of 0.6 per cent, driven by solid monthly gains in construction output of 0.8 per cent, manufacturing activity of 0.7 per cent, and utility production of 0.7 per cent.
Canadian Economy Advances 0.3 Per Cent in May as Second Quarter Gains Accelerate
During May, service-producing sectors increased by 0.2 per cent, marking the fourth consecutive month of expansion for this segment. The public sector, which includes education, healthcare, and public administration, grew by 0.3 per cent. Contributions from finance and insurance activities were positive, alongside spectator sports, which experienced increased attendance and broadcast revenue as Canadian professional hockey teams progressed through playoff rounds. Overall, industrial data indicated that service output maintained consistent momentum across both public and private sectors.
Preliminary guidance from national statistical officials suggests that real GDP expanded by a further 0.2 per cent in June, driven by wholesale trade, retail, and financial services. Combining these monthly figures, economists at CIBC estimate that the annualized growth rate for the second quarter stands at approximately 3.4 per cent, notably above the 2.5 per cent forecast by the Bank of Canada. Senior economist Andrew Grantham highlighted that the robust second-quarter data confirms that the Canadian economy grew 0.3 per cent in May, effectively settling discussions about a potential technical recession.
Energy Sector Boosts as Alberta Bitumen Maintenance is Postponed
Although the second-quarter pace accelerated, analysts at BMO Financial Group anticipate a slowdown in output growth during the latter half of the year. Chief economist Doug Porter noted that while the May figures demonstrate resilience amid recent uncertainties, ongoing trade tensions and high fuel costs could restrain third-quarter expansion. Nevertheless, the positive trajectory of GDP offers significant flexibility for monetary policy decisions, as central bank officials consider interest rate adjustments 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 declines were mainly due to temporary volatility rather than a structural downturn. Marc Desormeaux, the council’s vice president of policy, pointed out that strong fundamentals in resource extraction and manufacturing sectors continue to support the country’s bottom line. As the official second-quarter GDP data prepares for release at the end of August, financial markets currently assign a near 97 per cent probability that the Bank of Canada will keep its benchmark borrowing rate unchanged at the upcoming September policy meeting.