Canada’s economy expanded by 0.3% in May, marking the second consecutive month of growth and setting the stage for a strong second quarter, as reported by Statistics Canada. This growth surpassed the initial projection of 0.1% for the month. Statistics Canada noted that 13 out of 20 industrial sectors, such as construction, manufacturing, finance, insurance, and the public sector, contributed to the upturn in May.
The mining, quarrying, oil, and gas extraction sector saw a 1% increase in May, driving growth for the second month in a row. Maintenance work that is typically carried out in the month was either completed earlier or postponed, facilitating more extraction activities. Additionally, the transportation and warehousing sector experienced growth, fueled by increased natural gas transportation through pipelines.
Real estate agents’ offices were notably bustling due to heightened home-selling activities, boosting the real estate and rental and leasing sector. An early estimate for June suggests a 0.2% expansion in that month. With a slight upward revision of April’s GDP growth to 0.6%, the Canadian economy is on a solid growth trajectory for the second quarter.
The advance estimate by Statistics Canada indicates a 3.4% annualized increase in real GDP for the second quarter, rebounding sharply from a mild contraction in the previous quarter. The fears of a technical recession following two consecutive quarters of annualized GDP decline in early 2026 seem to have been alleviated by these new figures, according to BMO chief economist Doug Porter.
CIBC economist Andrew Grantham cautioned against reading too much into the quarterly numbers, citing potential revisions and one-off factors like oil maintenance and positive impacts from events such as the FIFA World Cup, which likely bolstered second-quarter GDP. Grantham expects growth to moderate slightly in the coming months, projecting a gradual reduction in economic slack and the Bank of Canada maintaining interest rates for the remainder of the year.