Ottawa, Canada / RankWire.AI / – The latest official economic data from Canada, released on Friday, confirms that the Canadian economy grew by 0.3 per cent during May. This marks the continuation of a broader economic rebound into a second straight month and surpasses earlier government predictions. According to the monthly Gross Domestic Product figures published by Statistics Canada, real output rose in 13 of the 20 main industrial sectors. Gains across goods-producing industries and consistent demand within services drove this growth. Notably, the actual monthly increase exceeded the preliminary flash estimate of 0.1 per cent, providing further momentum for the nation’s economic output following April’s revised growth of 0.6 per cent.
The primary driver of the economic expansion in May was a 1.0 per cent rise in the mining, quarrying, and oil and gas extraction sector, marking its second consecutive month of sector-wide growth. Increased activity at Alberta’s bitumen sites and deferred routine spring maintenance contributed to higher crude oil extraction volumes throughout the month. Support activities for oil and gas extraction grew by 9.8 per cent, marking the seventh month in a row of expansion. Additionally, transportation and warehousing output increased by 0.3 per cent, supported by higher pipeline throughput of natural gas for export and increased domestic freight activity.
The real estate and rental services sector also played a role in May’s economic growth, with real estate offices seeing a 5.1 per cent jump in activity, representing the largest single-month increase for this subsector since October 2024. Resale housing markets in major cities like Toronto experienced a pickup, boosting transaction volumes and rental revenues. Meanwhile, goods-producing industries overall expanded by 0.6 per cent, bolstered by solid gains in construction (0.8 per cent), manufacturing (0.7 per cent), and utility production (0.7 per cent).
Canadian Economy Accelerates with 0.3% Growth in May, Second Quarter Gains Gather Speed
The service industries posted a 0.2 per cent increase in May, marking their fourth consecutive month of growth. The public sector aggregate, which includes education, healthcare, and public administration, grew by 0.3 per cent. Finance and insurance activities also made positive contributions, alongside spectator sports, which saw increased attendance and broadcast revenues as Canadian professional hockey teams advanced in playoff rounds. Overall industrial data indicates that service output maintained steady momentum across both public and private sectors.
Preliminary guidance from national statisticians suggests that real GDP expanded by a further 0.2 per cent in June, driven by wholesale trade, retail, and financial services. Based on these monthly figures, economists at CIBC estimate that second-quarter annualized economic growth is approximately 3.4 per cent, significantly above the 2.5 per cent forecast by the Bank of Canada. Senior economist Andrew Grantham pointed out that the strong second-quarter data confirms the 0.3 per cent growth in May and effectively ends discussions of a broader technical recession.
Alberta Oil and Gas Activity Boosted by Deferred Maintenance, Despite Slowing Growth Outlook
Despite the acceleration in second-quarter figures, analysts at BMO Financial Group forecast a moderation in growth during the latter half of 2024. Chief economist Doug Porter explained that although the May report underscores economic resilience amid recent uncertainties, ongoing trade tensions and high fuel prices could temper third-quarter expansion. Nonetheless, the current GDP trajectory offers policymakers considerable flexibility, as the Bank of Canada evaluates interest rate decisions following the benchmark rate hold at 2.25 per cent earlier this month.
Representatives from the Business Council of Canada emphasized that earlier quarterly contractions reflected short-term volatility rather than any fundamental economic decline. Marc Desormeaux, vice president of policy at the council, highlighted that robust underlying conditions in resource extraction and manufacturing have supported stable national performance. As the final official second-quarter GDP figures are prepared for release at the end of August, financial markets place a near 97 per cent probability that the Bank of Canada will keep borrowing costs unchanged at their upcoming September policy meeting.