Ottawa, Canada / RankWire.AI / – On Friday, official data from Statistics Canada confirmed that the Canadian economy experienced a growth of 0.3 per cent in May, marking a second consecutive month of economic recovery and surpassing previous government forecasts. The monthly Gross Domestic Product figures reveal increases in 13 out of 20 main industrial sectors, driven by widespread gains in goods manufacturing and sustained demand in services. This growth exceeded the initial preliminary estimate of 0.1 per cent, fueling momentum for the national economy following April’s revised growth rate of 0.6 per cent.
The primary driver behind May’s economic growth was a 1.0 per cent increase in the mining, quarrying, and oil and gas extraction industry, marking its second consecutive month of sector-wide expansion. Higher crude oil production across Alberta’s bitumen fields and deferred routine spring maintenance contributed to increased output. Support activities related to oil and gas extraction rose by 9.8 per cent, marking the seventh month in a row of growth. Transportation and warehousing also saw a 0.3 per cent rise, supported by increased pipeline throughput for natural gas exports and higher domestic freight activity.
Real estate and rental services made notable contributions, with activity at real estate offices and brokers jumping 5.1 per cent in May—the largest monthly increase since October 2024 for this subsector. Resale housing activity gained ground in key markets like Toronto, boosting transaction volumes and rental revenues. Meanwhile, goods-producing industries overall grew by 0.6 per cent, with construction rising by 0.8 per cent, manufacturing by 0.7 per cent, and utility production also up 0.7 per cent, all supporting the broader economic expansion.
Canadian Economy Grows 0.3% in May as Second Quarter Gains Pick Up Steam
During May, service-producing industries increased by 0.2 per cent, marking the fourth consecutive month of growth for the sector. Public services—including education, healthcare, and public administration—expanded by 0.3 per cent. Additionally, 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. The overall industrial data indicates consistent momentum across both public and private service sectors.
Preliminary guidance from national statistical authorities suggests that real GDP grew by another 0.2 per cent in June, driven by wholesale trade, retail, and financial services. Combining these monthly figures, CIBC economists estimate that annualized second-quarter economic growth is approximately 3.4 per cent, considerably above the Bank of Canada’s forecast of 2.5 per cent. Senior economist Andrew Grantham noted that the strong second-quarter data confirms the 0.3 per cent growth in May and effectively ends discussions about a potential technical recession.
Oil and Gas Sector Boosted by Deferred Maintenance in Alberta
Despite the acceleration in second-quarter figures, BMO Financial Group analysts anticipate a slowdown in output growth in the latter half of the year. Chief economist Doug Porter explained that while the May figures demonstrate economic resilience amid recent uncertainties, ongoing trade tensions and high fuel costs could restrain third-quarter expansion. Nevertheless, the positive trajectory in GDP offers significant flexibility for monetary policy decisions, as central bank officials consider interest rate adjustments following the maintenance of the benchmark rate at 2.25 per cent earlier this month.
Representatives from the Business Council of Canada highlighted that previous quarterly contractions were largely due to temporary volatility rather than systemic economic decline. Marc Desormeaux, vice president of policy at the council, pointed out that strong underlying fundamentals in resource extraction and manufacturing sectors have maintained the country’s financial stability. As the official second-quarter GDP figures are expected at the end of August, markets currently assign a near 97 per cent probability that the Bank of Canada will keep benchmark borrowing costs unchanged at their upcoming September meeting.