Canada's Economy Rebounds Sharply in Q2 Amid Strong Housing Market

Statistics Canada reported that the economy showed signs of rebounding in May, following a mild contraction in the first three months of the year.

The real estate sector saw activity increase by 5.1 percent in May, its biggest monthly jump since October 2024, as the spring housing market began to warm up in provinces like Ontario and British Columbia.

The construction, manufacturing, finance, and insurance sectors all grew for a second consecutive month, while the public sector also expanded in May.

According to StatCan's advance estimate, real GDP rose 3.4 percent on an annualized basis in the second quarter, surpassing the Bank of Canada's forecasts of 2.5 percent growth.

TD Bank economist Marc Ercolao said that the economy's resilience is proving strong enough to forego additional interest rate relief, while contained inflation readings and ongoing trade uncertainty argue against a shift towards a more restrictive stance.