Canada’s economy experienced a 0.3% growth in May, marking the second consecutive month of expansion and setting a positive trend for the second quarter, as per data from Statistics Canada. The growth exceeded the initial projection of 0.1% by the agency.
Thirteen out of twenty 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 saw a 1% increase, driven by advanced maintenance work and increased extraction activities.
Additionally, the transportation and warehousing sectors saw growth as more natural gas was transported to markets due to pipeline expansions. Real estate activities were also vibrant, particularly in home sales, boosting the real estate and rental and leasing industry.
An early estimation for June indicates a 0.2% growth, further solidifying the economy’s performance in the second quarter. With a slight revision to April’s GDP growth to 0.6%, the Canadian economy is on track for a robust second quarter.
The advance estimate by Statistics Canada suggests a 3.4% annualized real GDP growth for the second quarter, rebounding significantly from a mild contraction in the preceding months. Despite concerns of a technical recession earlier in the year, BMO chief economist Doug Porter believes that the economy is resilient and continuing to progress.
However, CIBC economist Andrew Grantham advises caution, noting that some temporary factors, such as maintenance schedules and events like the FIFA World Cup, may have artificially boosted GDP figures. Grantham predicts a slower growth pace in the upcoming months and expects the Bank of Canada to maintain current interest rates due to lingering economic slack.