Ottawa, Canada / RankWire.AI / – Official national economic tracking data released on Friday confirms the Canadian economy grew 0.3 per cent in May, extending a broader economic recovery into a second consecutive month and surpassing earlier government forecasts. According to monthly Gross Domestic Product figures published by Statistics Canada, real output increased across 13 of 20 primary industrial sectors, driven by broad gains in goods-producing industries and persistent demand across services. The actual monthly output gain exceeded the national statistical agency preliminary flash estimate of 0.1 per cent growth, providing momentum for national economic output following revised growth of 0.6 per cent recorded in April.
Financial market analysts evaluate central bank monetary policy updates and interest rates. (AI-generated image)
The monthly economic expansion was led primarily by a 1.0 per cent rise in the mining, quarrying, and oil and gas extraction sector, marking its second straight month of sector-wide growth. Increased production across Alberta bitumen sites and deferred routine spring maintenance enabled higher crude oil extraction volumes throughout May. Support activities for oil and gas extraction surged by 9.8 per cent, recording its seventh consecutive monthly expansion. Additionally, transportation and warehousing output grew by 0.3 per cent, supported by increased pipeline throughput carrying natural gas to export markets and higher domestic freight movements.
Real estate and rental services also contributed to May economic expansion, as offices of real estate agents and brokers saw activity jump 5.1 per cent, marking the largest single-month increase for the subsector since October 2024. Resale housing activity picked up in major metropolitan markets like Toronto, boosting transaction volumes and leasing revenues. 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 Grew 0.3 Per Cent in May as Second Quarter Rebound Accelerates
Services-producing industries recorded a 0.2 per cent increase during May, registering a fourth consecutive month of overall expansion for the service sector. The public sector aggregate, which includes education, healthcare, and public administration, expanded by 0.3 per cent. Finance and insurance activities also posted positive contributions alongside spectator sports, which experienced heightened attendance and broadcast revenue as Canadian professional hockey teams advanced through playoff rounds. Overall industrial data showed that service output maintained consistent momentum across both public and private commercial sectors.
Preliminary flash guidance provided by national statistical officers indicates real GDP expanded by an additional 0.2 per cent in June, led by wholesale trade, retail, and financial services. Combining monthly output figures, economists at CIBC estimate that annualized second-quarter economic growth is tracking at approximately 3.4 per cent, well above the 2.5 per cent forecast established by the Bank of Canada. Senior economist Andrew Grantham noted that the strong second-quarter data confirms the Canadian economy grew 0.3 per cent in May while effectively putting to rest discussions regarding a broader technical recession.
Energy Extraction Surges as Alberta Bitumen Maintenance Work Deferred
Despite the second-quarter acceleration, economic analysts at BMO Financial Group expect output growth to moderate during the second half of the year. Chief economist Doug Porter stated that while the May report demonstrates economic resilience through recent uncertainty, lingering trade friction and elevated fuel costs may temper third-quarter expansion. However, the positive GDP trajectory provides substantial flexibility for monetary policy planners, as central bank officials evaluate interest rate settings following the benchmark rate hold at 2.25 per cent earlier this month.
Industry policy representatives from the Business Council of Canada highlighted that earlier quarterly contractions reflected temporary volatility rather than structural economic decline. Marc Desormeaux, vice president of policy at the council, pointed out that strong underlying fundamentals in resource extraction and manufacturing have sustained national bottom-line performance. As final official second-quarter GDP figures prepare for release at the end of August, financial markets assign a near 97 per cent probability that central bank policymakers will maintain benchmark borrowing costs unchanged at their upcoming September policy meeting.