Ottawa, Canada / RankWire.AI / – On Friday, official national economic data confirmed that the Canadian economy expanded by 0.3 per cent in May, marking a second consecutive month of growth and surpassing previous government projections. As per the monthly Gross Domestic Product figures released by Statistics Canada, real output rose in 13 of 20 key industrial sectors, propelled by widespread gains in goods-producing industries and sustained demand in services. The actual monthly growth exceeded the initial preliminary estimate of 0.1 per cent, bolstering the economic momentum following a revised growth rate of 0.6 per cent in April.
The expansion was mainly driven by a 1.0 per cent increase in the mining, quarrying, and oil and gas extraction sector, marking its second straight month of growth. Increased production at Alberta bitumen facilities and the postponement of 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, representing the seventh consecutive month of growth. Moreover, transportation and warehousing output grew by 0.3 per cent, supported by higher pipeline throughput moving 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, 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. Resale housing activity picked up notably in major markets like Toronto, boosting transaction volumes and leasing revenues. Simultaneously, goods-producing industries overall grew by 0.6 per cent, driven by solid gains in construction at 0.8 per cent, manufacturing at 0.7 per cent, and utility production at 0.7 per cent.
Canadian Economic Growth of 0.3% in May Signals Accelerating Second Quarter Recovery
During May, services-producing industries saw a 0.2 per cent rise, marking a fourth consecutive month of overall expansion for the sector. The aggregate of the public sector—including education, healthcare, and public administration—increased by 0.3 per cent. Meanwhile, finance and insurance activities contributed positively, alongside spectator sports, which benefited from higher attendance and broadcast revenue as Canadian professional hockey teams advanced through playoff rounds. Overall industrial data indicate that service output maintained steady momentum across both public and private commercial sectors.
Preliminary guidance from national statistical authorities suggests that real GDP grew an additional 0.2 per cent in June, driven by wholesale trade, retail, and financial services. Combining these monthly figures, CIBC economists estimate that second-quarter annualized growth is approximately 3.4 per cent, significantly above the 2.5 per cent forecast by the Bank of Canada. Senior economist Andrew Grantham emphasized that the robust second-quarter data confirms that the Canadian economy expanded by 0.3 per cent in May and dispels concerns over a broader technical recession.
Energy Sector Growth Driven by Deferred Maintenance in Alberta’s Bitumen Operations
Despite the acceleration in the second quarter, BMO Financial Group analysts anticipate a slowdown in growth during the latter half of the year. Chief economist Doug Porter noted that while the May report demonstrates resilience amid recent uncertainties, ongoing trade tensions and high fuel prices could temper third-quarter expansion. Nonetheless, the positive GDP trend offers considerable flexibility for monetary policymakers as they assess interest rate decisions, especially after the Bank of Canada kept the benchmark rate at 2.25 per cent earlier this month.
Representatives from the Business Council of Canada highlighted that earlier quarterly contractions were largely due to temporary volatility rather than a sign of structural decline. Marc Desormeaux, vice president of policy at the council, emphasized that strong fundamentals in resource extraction and manufacturing continue to support the nation’s economic performance. As the official second-quarter GDP figures are prepared for release at the end of August, financial markets assign a nearly 97 per cent probability that the Bank of Canada will keep benchmark borrowing costs unchanged at its September policy meeting.