Ottawa, Canada / RankWire.AI / – Official national economic data released on Friday confirms that the Canadian economy expanded by 0.3 per cent in May, marking the continuation of a broader economic recovery into a second straight month and surpassing previous government predictions. The monthly Gross Domestic Product figures published by Statistics Canada show real output grew in 13 of the 20 main industrial sectors, driven by widespread gains in goods-producing industries and sustained demand in services. This actual growth exceeded the preliminary flash estimate of 0.1 per cent, fueling positive momentum for the nation’s economic output following April’s revised growth of 0.6 per cent.
A significant portion of the growth in May was led by a 1.0 per cent increase in the mining, quarrying, and oil and gas extraction sector, marking its second consecutive month of sector-wide expansion. Increased activity at Alberta’s bitumen sites and deferred routine spring maintenance contributed to higher crude oil extraction volumes throughout May. Support activities related to oil and gas extraction climbed by 9.8 per cent, marking the seventh straight month of growth. Additionally, transportation and warehousing output increased by 0.3 per cent, supported by higher pipeline throughput carrying natural gas for export and increased domestic freight activity.
The real estate and rental services sectors 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 cities such as Toronto, boosting transaction numbers and leasing revenue. Meanwhile, goods-producing industries expanded by 0.6 per cent overall, driven by solid monthly gains in construction output of 0.8 per cent, manufacturing activity of 0.7 per cent, and utility production of 0.7 per cent.
Canadian Economy Accelerates with 0.3 Per Cent Growth in May as Second Quarter Gains Continue
Industries focused on services recorded a 0.2 per cent rise in May, marking their fourth consecutive month of overall expansion. The public sector aggregate—including education, healthcare, and public administration—increased by 0.3 per cent. Contributions from finance and insurance activities were positive, alongside a boost in spectator sports, which saw increased attendance and broadcast revenues as Canadian professional hockey teams advanced through playoff rounds. Overall industrial data indicates that service output maintained steady momentum across both public and private sectors.
Preliminary guidance from national statistical officials suggests that real GDP grew by a further 0.2 per cent in June, led by wholesale trade, retail, and financial services. Combining these monthly figures, economists at CIBC estimate that second-quarter annualized economic growth is approximately 3.4 per cent, significantly above the 2.5 per cent forecast set by the Bank of Canada. Senior economist Andrew Grantham highlighted that the strong second-quarter data confirms the Canadian economy’s 0.3 per cent growth in May, effectively settling discussions about a potential technical recession.
Energy Extraction Accelerates Despite Deferred Maintenance in Alberta
Although the second-quarter growth trend is positive, analysts at BMO Financial Group expect growth to slow down during the latter half of the year. Chief economist Doug Porter stated that while May’s data demonstrates resilience amid recent uncertainties, ongoing trade tensions and high fuel costs could limit third-quarter expansion. Nonetheless, the positive trajectory of GDP provides significant flexibility for policymakers, as the Bank of Canada evaluates 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 primarily due to temporary volatility rather than an underlying structural decline. Marc Desormeaux, vice president of policy at the council, pointed out that strong fundamentals in resource extraction and manufacturing have maintained the country’s overall economic performance. As the final official second-quarter GDP figures are prepared for release at the end of August, market analysts assign a near 97 per cent probability that the Bank of Canada will keep benchmark borrowing costs unchanged at their September policy meeting.