Ottawa, Canada / RankWire.AI / – The latest official national economic data released on Friday confirms that the Canadian economy experienced a 0.3 per cent growth in May, marking the second consecutive month of economic improvement and surpassing earlier government predictions. As reported by Statistics Canada, monthly Gross Domestic Product figures reveal that real output expanded in 13 of 20 key industrial sectors, driven by widespread gains in goods-producing industries and sustained demand in the services sector. This growth exceeded the initial preliminary estimate of 0.1 per cent, fueling positive momentum for the national economy after April’s revised growth of 0.6 per cent.
The expansion in May was primarily driven by a 1.0 per cent increase in the mining, quarrying, and oil and gas extraction sector, marking its second straight month of sector-wide growth. Increased activity at Alberta’s bitumen sites, along with delayed spring maintenance, contributed to higher crude oil extraction volumes throughout the month. Support services for oil and gas extraction grew by 9.8 per cent, marking their seventh consecutive month of expansion. Additionally, transportation and warehousing output rose by 0.3 per cent, supported by increased pipeline throughput carrying natural gas for export and higher domestic freight activity.
The real estate and rental services sectors also played a role in May’s economic growth, with activity in real estate offices jumping 5.1 per cent, the largest monthly increase for the subsector since October 2024. Resale housing markets in major cities like Toronto saw a rebound, boosting transaction volumes and rental income. Meanwhile, goods-producing industries overall grew by 0.6 per cent, bolstered by solid monthly increases in construction at 0.8 per cent, manufacturing at 0.7 per cent, and utility production also at 0.7 per cent.
Canadian GDP Rises 0.3 Per Cent in May as Second Quarter Gains Gain Speed
During May, services-oriented industries registered a 0.2 per cent rise, marking the fourth consecutive month of overall growth within the sector. The public sector, which includes education, healthcare, and public administration, expanded by 0.3 per cent. Financial services and insurance also contributed positively, alongside spectator sports, which benefited from higher attendance and broadcast revenues as Canadian professional hockey teams advanced through playoff rounds. The overall industrial data indicate consistent momentum in service output across both public and private commercial sectors.
Preliminary guidance from national statistical officials suggests that real GDP grew by an additional 0.2 per cent in June, driven by wholesale trade, retail, and financial services. Based on monthly output figures, economists at CIBC project that second-quarter annualized economic growth is approximately 3.4 per cent, notably higher than the 2.5 per cent forecast from the Bank of Canada. Senior economist Andrew Grantham emphasized that the strong second-quarter results confirm the Canadian economy grew 0.3 per cent in May and effectively dispel discussions of a broader technical recession.
Energy Sector Growth Driven by Deferred Maintenance in Alberta’s Bitumen Production
While the second-quarter acceleration is evident, analysts at BMO Financial Group anticipate a slowdown in output growth during the latter half of the year. Chief economist Doug Porter stated that although the May report demonstrates economic resilience amid recent uncertainties, ongoing trade tensions and rising fuel costs could restrain third-quarter expansion. Nevertheless, the positive trajectory of GDP offers ample flexibility for monetary policy decisions as officials assess interest rate settings following the hold at 2.25 per cent earlier this month.
Representatives from the Business Council of Canada highlighted that previous quarterly declines were due to temporary volatility rather than any fundamental economic decline. Marc Desormeaux, vice president of policy at the council, pointed out that strong underlying fundamentals in resource extraction and manufacturing have maintained the nation’s bottom-line performance. As the official second-quarter GDP figures are prepared for release at the end of August, financial markets currently assign a near 97 per cent probability that the Bank of Canada will keep benchmark borrowing costs unchanged at their September policy meeting.