Ottawa, Canada / RankWire.AI / – Official data from the national economic tracking system released on Friday confirms that the Canadian economy expanded by 0.3 per cent in May, marking a second consecutive month of economic improvement and surpassing earlier government projections. According to monthly Gross Domestic Product figures published by Statistics Canada, real output increased across 13 of 20 key industrial sectors, driven by widespread gains in goods-producing industries and sustained demand in services. This monthly growth rate outperformed the initial flash estimate of 0.1 per cent, providing renewed momentum for the economy after a revised growth of 0.6 per cent in April.
The primary driver of May’s economic expansion was a 1.0 per cent increase in the mining, quarrying, and oil and gas extraction sector, marking its second consecutive month of growth. Higher crude oil extraction volumes throughout May were supported by increased production at Alberta bitumen sites and deferred spring maintenance routines. Support activities related to oil and gas extraction rose by 9.8 per cent, marking the seventh straight month of growth in this area. Additionally, transportation and warehousing activity grew by 0.3 per cent, fueled by increased pipeline throughput of natural gas to export destinations and a rise in domestic freight traffic.
The real estate and rental services sector also contributed to the May rise, with offices of real estate agents and brokers experiencing a 5.1 per cent jump—the largest single-month increase for this subsector since October 2024. The housing resale market picked up in major cities like Toronto, boosting transaction volumes and leasing revenues. Meanwhile, goods-producing industries overall grew by 0.6 per cent, supported by solid monthly gains in construction (0.8 per cent), manufacturing (0.7 per cent), and utility production (0.7 per cent).
Canadian Economy Advances 0.3 Per Cent in May as Second Quarter Growth Picks Up Speed
Industries providing services increased by 0.2 per cent during May, marking a fourth straight month of overall sector expansion. The public sector, which encompasses education, healthcare, and public administration, grew by 0.3 per cent. Finance and insurance activities also contributed positively, alongside spectator sports, which saw higher attendance and broadcast revenue as Canadian professional hockey teams advanced through playoff rounds. The overall industrial data suggests that service output maintained steady momentum across both public and private commercial sectors.
Preliminary estimates from national statistical officials indicate that real GDP expanded by an additional 0.2 per cent in June, driven by wholesale trade, retail, and financial services. Combining these monthly figures, CIBC economists estimate that the annualized second-quarter growth rate stands at approximately 3.4 per cent, significantly higher than the 2.5 per cent forecast from the Bank of Canada. Senior economist Andrew Grantham highlighted that this robust second-quarter data confirms the 0.3 per cent growth in May and effectively dispels concerns over a broader technical recession.
Energy Extraction Surges as Alberta Bitumen Maintenance Work Is Postponed
Despite the acceleration 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 stated that while May’s report demonstrates resilience amid recent uncertainties, ongoing trade tensions and high fuel prices could restrain third-quarter expansion. Nevertheless, the positive trajectory of GDP provides significant flexibility for monetary policy decision-makers as they assess 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 reflected short-term volatility rather than long-term economic decline. Marc Desormeaux, the council’s vice president of policy, pointed out that strong fundamentals in resource extraction and manufacturing have maintained the country’s overall performance. As the official second-quarter GDP figures are finalized for release at the end of August, financial markets assign a near 97 per cent probability that the Bank of Canada will keep borrowing costs unchanged at their September policy meeting.