Ottawa, Canada / RankWire.AI / – Official data on the national economy released on Friday confirms that the Canadian economy expanded by 0.3 per cent in May, marking a continuation of the broader economic recovery into a second consecutive month and exceeding earlier government predictions. As per monthly Gross Domestic Product figures published by Statistics Canada, real output increased in 13 of 20 key industrial sectors, supported by widespread growth in goods-producing industries and sustained demand in services. This actual monthly increase surpassed the preliminary flash estimate of 0.1 per cent growth from the national statistical agency, providing upward momentum for the country’s economic output after April’s revised growth of 0.6 per cent.
The expansion was chiefly driven by a 1.0 per cent rise in the mining, quarrying, and oil and gas extraction industry, marking its second consecutive month of sector-wide growth. Increased production across Alberta’s bitumen sites and deferred routine spring maintenance contributed to higher crude oil extraction levels throughout May. Support activities related to oil and gas extraction rose by 9.8 per cent, marking the seventh straight month of expansion. In addition, transportation and warehousing output grew by 0.3 per cent, fueled by increased pipeline throughput of natural gas for export markets and rising domestic freight activity.
Real estate and rental services also played a role in the May economic growth, with activity in real estate agent and broker offices jumping 5.1 per cent, the largest single-month increase for this subsector since October 2024. Resale housing activity picked up momentum in major urban centers like Toronto, boosting both transaction volumes and leasing revenues. Meanwhile, goods-producing industries saw an overall expansion of 0.6 per cent, driven by solid monthly increases in construction output of 0.8 per cent, manufacturing activity of 0.7 per cent, and utility production of 0.7 per cent.
Canadian Economic Growth Reaches 0.3% in May as Second Quarter Gains Accelerate
Industries related to services experienced a 0.2 per cent increase in May, marking a fourth consecutive month of overall growth in 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, alongside spectator sports, which benefited from increased attendance and broadcast revenues as Canadian professional hockey teams advanced in playoff rounds. The overall industrial data indicates that service output maintained steady momentum across both public and private commercial sectors.
Preliminary guidance from national statistical officials suggests that real GDP grew an additional 0.2 per cent in June, primarily driven by wholesale trade, retail, and financial services. When combined with 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 from the Bank of Canada. Senior economist Andrew Grantham noted that these strong second-quarter figures confirm that the Canadian economy grew by 0.3 per cent in May, effectively putting to rest any discussions of a broader technical recession.
Energy Sector Boom as Alberta’s Bitumen Maintenance Is Postponed
Despite the acceleration observed in the second quarter, analysts at BMO Financial Group forecast that output growth may slow during the latter half of the year. Chief economist Doug Porter explained that while the May report demonstrates resilience amid recent uncertainties, ongoing trade tensions and high fuel costs could restrict third-quarter expansion. Nonetheless, the positive GDP trajectory offers considerable flexibility for monetary policymakers as they assess interest rate decisions following the recent 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 indicating a structural decline. Marc Desormeaux, the council’s vice president of policy, pointed out that the fundamental strength of resource extraction and manufacturing sectors has maintained the nation’s economic performance. As the final official second-quarter GDP figures are scheduled for release at the end of August, financial markets currently assign a nearly 97 per cent probability that the Bank of Canada will keep benchmark interest rates unchanged at their September policy meeting.