Ottawa, Canada / RankWire.AI / – The latest national economic data released on Friday confirms that the Canadian economy grew by 0.3 percent in May. This marks the second consecutive month of growth, surpassing earlier government forecasts and extending the ongoing recovery. According to monthly Gross Domestic Product figures published by Statistics Canada, real output increased in 13 of the 20 primary industrial sectors. This growth was driven by widespread gains in goods-producing industries and persistent demand across services. The actual monthly growth exceeded the preliminary flash estimate of 0.1 percent, providing positive momentum following April’s revised growth of 0.6 per cent.
The main driver of May’s economic expansion was a 1.0 per cent increase in the mining, quarrying, and oil and gas extraction sector. This marked its second straight month of growth across the sector. Higher crude oil extraction throughout May was supported by increased activity at Alberta bitumen sites and deferred spring maintenance. Support activities for oil and gas extraction also expanded by 9.8 per cent, marking their seventh consecutive month of growth. Additionally, the transportation and warehousing sector grew by 0.3 per cent, supported by increased pipeline throughput that transported natural gas to export markets and higher freight volumes within the country.
The real estate and rental services sector also contributed to the economic growth in May. Offices of real estate agents and brokers experienced a 5.1 per cent rise in activity, the largest single-month increase for this subsector since October 2024. Resale housing activity in major markets such as Toronto picked up, boosting transaction volumes and leasing revenues. Meanwhile, goods-producing industries overall grew by 0.6 per cent, with notable gains in construction (0.8 per cent), manufacturing (0.7 per cent), and utility production (0.7 per cent).
Canadian Economy Gains 0.3 Per Cent in May as Second Quarter Growth Gains Momentum
Services-producing industries saw a 0.2 per cent increase during May. This marks the fourth consecutive month of overall expansion for the service sector. The public sector, which includes education, healthcare, and public administration, grew by 0.3 per cent. Finance and insurance activities also contributed positively, along with spectator sports, which experienced increased attendance and broadcast revenue as Canadian professional hockey teams advanced in playoff rounds. Overall industrial data indicates that service output maintained steady momentum across both public and private sectors.
Preliminary guidance from national statistical officers suggests that real GDP grew by an additional 0.2 per cent in June. The increase was led by wholesale trade, retail, and financial services. Combining these monthly figures, economists at CIBC estimate that the annualized second-quarter economic growth is approximately 3.4 per cent. This surpasses the 2.5 per cent forecast set by the Bank of Canada. Senior economist Andrew Grantham noted that the strong second-quarter data confirms that the Canadian economy grew 0.3 per cent in May. It also effectively puts an end to discussions about a broader technical recession.
Oil and Gas Activity Rises as Alberta Bitumen Maintenance Is Delayed
Despite the acceleration in the second quarter, economic analysts at BMO Financial Group expect growth to slow down in the latter half of the year. Chief economist Doug Porter stated that while May’s report shows resilience amid recent uncertainties, ongoing trade tensions and high fuel prices may temper third-quarter expansion. Nevertheless, the positive GDP trend provides flexibility for monetary policy decisions as central bank officials evaluate interest rate options 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 contractions were temporary and did not indicate a fundamental decline in the economy. Marc Desormeaux, vice president of policy at the council, pointed out that strong underlying fundamentals in resource extraction and manufacturing sectors have supported the country’s overall performance. As the final official second-quarter GDP figures are prepared for release at the end of August, financial markets suggest there is a near 97 per cent probability that the Bank of Canada will keep borrowing costs steady at their September policy meeting.