Canada’s economy expanded by 0.3 percent 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 initial projection of 0.1 percent by Statistics Canada.

Of the 20 industrial sectors monitored, 13 sectors, including construction, manufacturing, finance, insurance, and the public sector, contributed to the overall gains for the month. The mining, quarrying, oil, and gas extraction sector saw a 1 percent increase in May, driving growth for the second consecutive month. Maintenance activities typically scheduled for the month were either completed earlier or postponed, facilitating increased extraction activities.

Furthermore, transportation and warehousing sectors also saw growth, with pipelines facilitating more natural gas exports, boosting market activity. Real estate agents’ offices experienced heightened activity due to increased home sales, thus boosting the real estate and rental and leasing sector.

An early estimate for June suggests a 0.2 percent expansion in the economy for that month. Additionally, Statistics Canada revised the GDP growth for April slightly upward to 0.6 percent, positioning the Canadian economy for a robust second quarter.

The advance estimate from the data agency indicates a 3.4 percent annualized growth in real GDP for the second quarter, rebounding sharply from a mild contraction in the first quarter of the year. Concerns of a technical recession arose after two consecutive quarters of GDP contraction on an annualized basis earlier in 2026.

Chief economist at BMO, Doug Porter, noted that the recent data indicates that the earlier concerns about a recession were exaggerated, emphasizing the resilience of the economy. However, CIBC economist Andrew Grantham cautioned against reading too much into the quarterly numbers as they are subject to revisions. Grantham also highlighted one-off factors, such as oil maintenance schedules and positive impacts from events like the FIFA World Cup, which likely influenced the GDP growth in the second quarter. He predicted a slightly slower growth rate in the upcoming months, anticipating the Bank of Canada to maintain interest rates for the remainder of the year.