Ottawa, Canada / RankWire.AI / – Confirmed by official national economic data released on Friday, the Canadian economy expanded by 0.3 per cent in May, marking a continuation of the country’s broader economic recovery into a second straight month and surpassing earlier government predictions. The monthly Gross Domestic Product figures published by Statistics Canada reveal that real output rose in 13 of 20 primary industrial sectors, driven by widespread gains in goods-producing industries and sustained demand in services. This actual increase exceeded the preliminary flash estimate of 0.1 per cent growth, providing positive momentum for the national economy after a revised growth of 0.6 per cent in April.
The expansion for the month was primarily led by a 1.0 per cent rise in the mining, quarrying, and oil and gas extraction sector, which experienced its second consecutive month of growth in this industry. Increased production at Alberta bitumen sites, combined with deferred routine spring maintenance, contributed to higher crude oil extraction volumes throughout May. Support activities related to oil and gas extraction surged by 9.8 per cent, marking the seventh straight month of growth in this area. Additionally, transportation and warehousing output increased by 0.3 per cent, supported by higher pipeline throughput transporting natural gas to export markets and increased domestic freight activity.
The real estate and rental services sector also played a role in May’s economic growth, as activity at offices of real estate agents and brokers surged 5.1 per cent, representing the largest single-month increase for this subsector since October 2024. Resale housing markets in major metropolitan areas like Toronto saw a revival, boosting transaction volumes and leasing revenues. Meanwhile, goods-producing industries overall grew by 0.6 per cent, with notable monthly gains in construction of 0.8 per cent, manufacturing of 0.7 per cent, and utility production of 0.7 per cent.
Second Quarter Gains Accelerate as Canadian Economy Posts 0.3 Per Cent Growth in May
Industries focused on services experienced a 0.2 per cent increase in May, marking a fourth consecutive month of overall expansion for the sector. The public sector, which includes education, healthcare, and public administration, expanded by 0.3 per cent. Positive contributions also came from finance and insurance activities, along with spectator sports, which benefited from increased attendance and broadcast revenue as Canadian professional hockey teams advanced in playoff rounds. The overall industrial data indicates that service output maintained consistent momentum across both public and private commercial sectors.
Preliminary guidance from national statistical officials suggests that real GDP grew by an additional 0.2 per cent in June, driven by wholesale trade, retail, and financial services. Combining the monthly output 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 stated that the strong second-quarter data confirms the Canadian economy’s 0.3 per cent growth in May and effectively puts to rest discussions about a potential technical recession.
Alberta Bitumen Maintenance Delays Fuel Surge in Energy Extraction
Despite the acceleration in second-quarter growth, analysts from BMO Financial Group predict that output growth will slow during the latter half of the year. Chief economist Doug Porter noted that while May’s report demonstrates resilience amid recent uncertainties, ongoing trade tensions and high fuel prices could temper expansion in the third quarter. Nevertheless, the positive GDP trend offers ample flexibility for monetary policy decisions as officials at the central bank evaluate interest rate settings following the hold at 2.25 per cent earlier this month.
Representatives from the Business Council of Canada emphasized that earlier quarterly contractions were due to temporary volatility rather than a fundamental economic decline. Marc Desormeaux, vice president of policy at the council, pointed out that strong underlying fundamentals in resource extraction and manufacturing have supported the country’s overall performance. As the official second-quarter GDP figures are set for release at the end of August, financial markets assign a near 97 per cent probability that the Bank of Canada will keep benchmark borrowing rates unchanged at their upcoming September policy meeting.
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