Canada’s economy expanded by 0.3% in May, marking the second consecutive month of growth and setting a positive trajectory for the second quarter, as per Statistics Canada. This growth exceeded the agency’s initial forecast of 0.1% for the month.
Statistics Canada reported that 13 out of 20 industrial sectors, including construction, manufacturing, finance, insurance, and the public sector, contributed to the overall gains in May. The mining, quarrying, oil, and gas extraction sector recorded a 1% increase, driven by early or deferred maintenance work that facilitated more extraction.
Additionally, transportation and warehousing sectors saw growth, fueled by increased natural gas transportation through pipelines. Real estate activity was notably vibrant, leading to a surge in the real estate and rental and leasing sector.
An early projection for June suggests a 0.2% expansion in the economy for that month. With a slight upward revision of April’s GDP growth to 0.6%, Canada is on track for robust growth in the second quarter.
While concerns of a technical recession loomed following two consecutive quarters of GDP contraction in 2026, BMO chief economist Doug Porter indicated that the economy’s resilience was underestimated. CIBC economist Andrew Grantham cautioned against overinterpreting the quarterly data, citing potential one-off factors like oil maintenance and the positive impacts of events like the FIFA World Cup that may have temporarily boosted GDP.
Grantham predicted a slower growth pace in the upcoming months, emphasizing a gradual reduction in economic slack and an expectation for the Bank of Canada to maintain interest rates throughout the year.
