Canada’s economy expanded by 0.3% in May, marking the second consecutive month of growth and setting a strong pace for the second quarter, as reported by Statistics Canada. This growth surpassed the agency’s initial projection of 0.1% for the month. A total of 13 out of 20 industrial sectors, including construction, manufacturing, finance, insurance, and the public sector, contributed to the overall growth in May.
The mining, quarrying, oil, and gas extraction sector experienced a 1% increase in May, driving growth for the second month in a row. Transportation and warehousing also saw a rise, with pipelines facilitating the export of more natural gas. Real estate activities were particularly brisk, boosting the real estate and rental and leasing sector.
An early estimate for June suggests a 0.2% expansion, further solidifying the economy’s growth trajectory. Statistics Canada revised April’s GDP growth slightly upward to 0.6%, positioning the Canadian economy for a robust second quarter.
The advance estimate from the data agency indicates a 3.4% annualized real GDP growth in the second quarter, rebounding sharply from a slight contraction in the first quarter. Despite concerns about a technical recession earlier in the year, BMO chief economist Doug Porter noted that the recent numbers reflect ongoing economic progress.
While some temporary factors may have contributed to the second-quarter GDP growth, analysts like CIBC economist Andrew Grantham anticipate a more moderate pace in the upcoming months. Grantham projects a gradual reduction in economic slack and expects the Bank of Canada to maintain interest rates for the rest of the year.