Canada's Economy Shows Signs of Q2 Rebound Amid Broad-Based Growth

Early data suggests Canada is on track for a solid economic rebound in Q2, according to economists parsing the latest gross domestic product figures. Statistics Canada reported that real GDP rose 0.3 per cent in May, exceeding StatCan's initial estimate of 0.1 per cent growth. The broad-based growth in May topped expectations for 0.2 per cent growth in June, pointing to a 3.4 per cent annualized gain in the second quarter.

Andrew Grantham, senior economist at CIBC, noted that growth was driven by sectors such as oil and gas extraction, which bounced back from early maintenance activity, and a resurgent housing market, which saw its biggest monthly jump since October 2024. The public sector also expanded in May, along with construction, manufacturing, and the finance and insurance sectors.

TD Bank economist Marc Ercolao said most recent data hasn't shown much evidence of a meaningful downturn, while BMO chief economist Doug Porter expects growth to moderate in the second half of the year from the second quarter's robust pace. The Bank of Canada is scheduled to make its next interest rate decision on September 2.