Ottawa, Canada / RankWire.AI / – On Friday, official national economic data confirmed that Canadian economic output increased by 0.3 per cent in May, marking the second consecutive month of growth and surpassing earlier government estimates. Statistics Canada’s monthly Gross Domestic Product figures show that real production advanced in 13 of 20 key industrial sectors, driven by widespread gains in manufacturing and persistent demand in the services industry. This growth exceeded the preliminary flash estimate of 0.1 per cent, bolstering economic momentum after April’s revised growth of 0.6 per cent.
The expansion was primarily led by a 1.0 per cent increase in the mining, quarrying, and oil and gas extraction sector, marking a second straight month of growth for this industry. Higher crude oil output was supported by increased activity at Alberta’s bitumen sites and deferred spring maintenance, allowing for greater extraction volumes throughout May. Support activities related to oil and gas extraction saw a 9.8 per cent rise, marking the seventh consecutive month of expansion. Additionally, the transportation and warehousing sector grew by 0.3 per cent, driven by higher pipeline throughput for natural gas exports and increased domestic freight activity.
The real estate and rental services sector also contributed to May’s economic growth, with activity in offices of real estate agents and brokers jumping 5.1 per cent, representing the largest single-month increase in this subsector since October 2024. Resale housing markets in major cities like Toronto experienced a boost, leading to higher transaction volumes and rental revenues. Meanwhile, overall goods-producing industries expanded by 0.6 per cent, supported by notable gains in construction at 0.8 per cent, manufacturing at 0.7 per cent, and utility production at 0.7 per cent.
Canadian GDP Growth Accelerates to 0.3 Per Cent in May as Second Quarter Gains Gain Momentum
In May, service-related industries increased by 0.2 per cent, marking a fourth consecutive month of growth within the sector. The public sector, which includes education, healthcare, and public administration, grew by 0.3 per cent. The finance and insurance industries also made positive contributions, alongside spectator sports, which saw attendance and broadcast revenues rise as Canadian professional hockey teams advanced through playoff rounds. Overall industrial data indicates that service sector output maintained steady momentum across both public and private commercial domains.
Preliminary guidance from national statistical officials suggests that real GDP increased by a further 0.2 per cent in June, supported by wholesale trade, retail, and financial services. Combining these monthly figures, CIBC economists estimate that second-quarter annualized growth is approximately 3.4 per cent—well above the 2.5 per cent forecast by the Bank of Canada. Senior economist Andrew Grantham emphasized that the robust second-quarter data confirms the economy’s 0.3 per cent growth in May and effectively dismisses talk of a broader technical recession.
Alberta’s Oil and Gas Sector Leads Growth as Maintenance Delays Fuel Industry Surge
Despite the second-quarter acceleration, BMO Financial Group analysts predict a moderation in growth during the latter half of the year. Chief economist Doug Porter noted that while the May report demonstrates resilience amid recent uncertainties, ongoing trade tensions and high fuel prices could restrain third-quarter expansion. Nonetheless, the positive GDP trend gives central bank policymakers significant flexibility as they assess interest rate decisions, following the rate hold at 2.25 per cent earlier this month.
Representatives from the Business Council of Canada highlighted that earlier quarterly contractions reflected temporary volatility rather than a fundamental economic decline. Marc Desormeaux, vice president of policy at the council, pointed out that strong underlying fundamentals in resource extraction and manufacturing have supported the country’s overall performance. As the final official second-quarter GDP figures are set to be released at the end of August, markets indicate a near 97 per cent probability that the Bank of Canada will keep benchmark borrowing costs steady at their September policy meeting.