Ottawa, Canada / RankWire.AI / – The latest official national economic figures released on Friday verify that the Canadian economy expanded by 0.3 per cent in May, marking the continuation of an ongoing recovery for a second month in a row and surpassing earlier government projections. As detailed in monthly Gross Domestic Product statistics published by Statistics Canada, real output saw increases in 13 out of 20 primary industrial sectors, driven by widespread growth in goods-producing industries and sustained demand across the service sector. The actual monthly growth exceeded the initial preliminary estimate of 0.1 per cent, boosting the momentum of the national economy after April’s revised growth rate of 0.6 per cent.
The expansion in May was primarily fueled by 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 throughout May were supported by increased production at Alberta bitumen sites and deferred routine spring maintenance. Support activities for oil and gas extraction also grew by 9.8 per cent, marking the seventh straight month of expansion. Additionally, the transportation and warehousing sector grew by 0.3 per cent, driven by increased pipeline throughput of natural gas for export 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 jumping 5.1 per cent—the largest single-month increase for this subsector since October 2024. Resale housing activity gained momentum in major markets like Toronto, boosting transaction volumes and leasing revenues. Meanwhile, goods-producing industries overall expanded by 0.6 per cent, supported by solid 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 Posts 0.3 Per Cent Growth in May as Second Quarter Gains Accelerate
During May, industries focused on services saw a 0.2 per cent increase, marking a fourth month in a row of overall expansion for the sector. The public sector aggregate, which includes education, healthcare, and public administration, grew by 0.3 per cent. The finance and insurance sector also contributed positively, along with spectator sports, which benefited from increased attendance and broadcast revenue as Canadian professional hockey teams advanced through playoff rounds. Overall industrial data indicated steady momentum in service output across both public and private sectors.
Preliminary guidance from national statistical authorities 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 growth is approximately 3.4 per cent, significantly higher than the 2.5 per cent forecast by the Bank of Canada. Senior economist Andrew Grantham highlighted that the robust second-quarter data confirms the 0.3 per cent growth in May and effectively settles any debate about a broader technical recession.
Alberta’s Oil Sector Growth Driven by Deferred Maintenance in Energy Extraction
Despite the acceleration seen in the second quarter, analysts at BMO Financial Group anticipate that growth in output will slow during the latter half of the year. Chief economist Doug Porter explained that while the May report demonstrates resilience in the economy amid recent uncertainties, ongoing trade tensions and high fuel prices could temper third-quarter expansion. Nevertheless, the positive trajectory of GDP provides considerable flexibility for monetary policy decisions, as officials at the Bank of Canada continue evaluating interest rate options following the decision to hold the benchmark rate at 2.25 per cent earlier this month.
Representatives from the Business Council of Canada emphasized that earlier quarterly declines reflected temporary volatility rather than any fundamental economic decline. Marc Desormeaux, vice president of policy at the council, noted that strong underlying fundamentals in resource extraction and manufacturing have supported the country’s overall performance. As the official second-quarter GDP figures are prepared for release at the end of August, financial markets assign a near 97 per cent probability that policymakers will keep benchmark borrowing costs unchanged at their September meeting.