Ottawa, Canada / RankWire.AI / – Data released on Friday by official national economic authorities confirms that the Canadian economy experienced a 0.3 per cent increase in May, marking a continuation of the economic recovery into a second straight month and surpassing earlier government predictions. The monthly Gross Domestic Product figures published by Statistics Canada indicate that real output rose in 13 of 20 key industrial sectors, fueled by widespread gains in goods-producing industries and ongoing demand within the services sector. This actual monthly increase exceeded the preliminary flash estimate of 0.1 per cent growth, providing positive momentum for the national economy following the revised 0.6 per cent growth recorded in April.
Leading the monthly expansion was a 1.0 per cent rise in the mining, quarrying, and oil and gas extraction industry, marking its second consecutive month of growth. Increased activity at Alberta’s bitumen sites and postponed spring maintenance allowed higher crude oil extraction levels throughout May. Support activities related to oil and gas extraction rose by 9.8 per cent, marking the seventh month in a row 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 traffic.
The real estate and rental services sector also contributed positively to May’s economic performance, 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 activity surged in major metropolitan areas such as Toronto, boosting transaction volumes and leasing revenue. Meanwhile, goods-producing industries expanded by 0.6 per cent overall, supported 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 Expands 0.3 Per Cent in May as Second Quarter Growth Accelerates
In May, industries focused on services saw a 0.2 per cent rise, marking the fourth consecutive month of overall growth within the sector. The public sector, including education, healthcare, and public administration, grew by 0.3 per cent. Finance and insurance activities also contributed positively, alongside increased attendance and broadcast revenues in spectator sports, as Canadian professional hockey teams progressed through playoff rounds. Overall industrial data suggest that service sector output maintained steady growth momentum across both public and private commercial spheres.
Preliminary guidance from national statistical officials indicates that real GDP expanded by a further 0.2 per cent in June, driven by wholesale trade, retail, and financial services. Combining these monthly figures, economists at CIBC project that annualized second-quarter growth is approximately 3.4 per cent, well above the 2.5 per cent forecast made by the Bank of Canada. Senior economist Andrew Grantham highlighted that the strong second-quarter data confirms the Canadian economy grew 0.3 per cent in May and effectively dismisses talk of a broader technical recession.
Energy Sector Growth Driven by Deferred Maintenance in Alberta’s Bitumen Industry
Despite the acceleration seen in the second quarter, analysts at BMO Financial Group predict a slowdown in growth during the latter half of the year. Chief economist Doug Porter noted that although May’s figures demonstrate economic resilience amid recent uncertainties, ongoing trade tensions and rising fuel costs could restrain third-quarter expansion. Nonetheless, the positive trajectory of GDP provides flexibility for monetary policy decisions, as central bank officials consider interest rate adjustments after holding the benchmark rate at 2.25 per cent earlier this month.
Representatives from the Business Council of Canada emphasized that earlier quarterly contractions reflected temporary volatility rather than long-term decline. Marc Desormeaux, vice president of policy at the council, pointed out that strong fundamentals in resource extraction and manufacturing sectors continue to support the nation’s bottom line. As the final official second-quarter GDP figures are scheduled for release at the end of August, financial markets assign a near 97 per cent probability that the Bank of Canada will maintain its benchmark borrowing rate at the upcoming September policy meeting.