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. The growth surpassed the initial projection 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 saw a 1% increase, leading growth for the second month in a row. Some maintenance activities were completed earlier or postponed, allowing for increased extraction.

Additionally, transportation and warehousing sectors experienced growth, driven by increased natural gas exports facilitated by pipeline operations. Real estate agent offices were notably busy, attributed to heightened home-selling activity, boosting the real estate and rental and leasing sector.

An early estimate for June suggests a 0.2% expansion for that month. With a slight upward revision of April’s GDP growth to 0.6%, the Canadian economy is poised for a robust second quarter.

The advance estimate from the data agency indicates a 3.4% annualized increase in real GDP for the second quarter, rebounding sharply from a slight contraction in the first quarter. Concerns of a technical recession arose following two consecutive quarters of annualized GDP decline in the first half of 2026.

BMO chief economist Doug Porter noted that the recent data indicates an economy still progressing, dispelling concerns of a recession earlier this year. However, CIBC economist Andrew Grantham cautioned against reading too much into the quarterly numbers, citing potential revisions and temporary factors like oil maintenance and positive impacts from events like the FIFA World Cup influencing second-quarter GDP growth. Grantham anticipates a slightly slower growth pace in the upcoming months, projecting the Bank of Canada to maintain interest rates for the remainder of the year.