Ottawa, Canada / RankWire.AI / – On Friday, official data from national economic monitoring confirmed that the Canadian economy expanded by 0.3 per cent in May, marking the continuation of a broader economic rebound into a second consecutive month and surpassing previous government forecasts. According to monthly Gross Domestic Product figures published by Statistics Canada, real output rose in 13 of 20 key industrial sectors, driven by widespread gains in goods-producing industries and sustained demand across service sectors. The actual increase in monthly output was higher than the preliminary flash estimate of 0.1 per cent growth, providing positive momentum for the national economy following a revised growth rate of 0.6 per cent in April.
The main driver behind the monthly economic expansion was a 1.0 per cent increase in the mining, quarrying, and oil and gas extraction sector, marking its second consecutive month of growth. Higher crude oil extraction volumes across Alberta bitumen sites, supported by deferred spring maintenance, contributed to this rise. Support activities related to oil and gas extraction surged by 9.8 per cent, marking its seventh straight month of expansion. Additionally, output in transportation and warehousing grew by 0.3 per cent, supported by increased pipeline throughput for natural gas exports and higher domestic freight activity.
The real estate and rental services sector also played a role in May’s economic growth, with activity in offices of real estate agents and brokers rising by 5.1 per cent — the largest single-month increase for this subsector since October 2024. Resale housing activity in major urban centers like Toronto picked up, boosting transaction volumes and leasing income. Meanwhile, goods-producing industries saw overall growth of 0.6 per cent, supported by solid monthly gains in construction at 0.8 per cent, manufacturing at 0.7 per cent, and utility production at 0.7 per cent.
Canadian Economy Experiences 0.3 Per Cent Growth in May, Accelerating Second Quarter Rebound
In May, service-producing industries rose by 0.2 per cent, marking a fourth straight month of overall expansion within the sector. The public sector aggregate, including education, healthcare, and public administration, increased by 0.3 per cent. Additionally, finance and insurance activities contributed positively, alongside spectator sports, which saw increased attendance and broadcast revenues as Canadian professional hockey teams advanced through playoff rounds. The industry data indicates that service output maintained steady momentum across both public and private commercial sectors.
Preliminary guidance from national statisticians suggests that real GDP grew by a further 0.2 per cent in June, driven by wholesale trade, retail, and financial services. When combining monthly figures, economists at CIBC 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 noted that the strong second-quarter data confirms that the Canadian economy grew by 0.3 per cent in May and effectively dispels any discussions of a broader technical recession.
Energy Sector Growth Driven by Deferred Maintenance in Alberta’s Bitumen Industry
Despite the acceleration in the second quarter, industry analysts at BMO Financial Group anticipate a moderation in output growth during the latter half of the year. Chief economist Doug Porter stated that while the May report demonstrates resilience amid recent uncertainties, ongoing trade tensions and high fuel prices might limit third-quarter expansion. Nonetheless, the upward trajectory of GDP offers significant flexibility for monetary policy decisions, as officials consider interest rate adjustments following the hold at 2.25 per cent earlier this month.
Representatives from the Business Council of Canada highlighted that earlier quarterly contractions reflected temporary fluctuations rather than long-term economic decline. Marc Desormeaux, the council’s vice president of policy, pointed out that strong fundamentals in resource extraction and manufacturing have supported overall performance. As the final official second-quarter GDP data approaches release at the end of August, financial markets assign a near 97 per cent probability that the Bank of Canada will keep benchmark borrowing costs steady at their September policy meeting.