Canadian Economy Shows Signs of Recovery in May

The Canadian economy showed signs of recovery in May, with several key sectors experiencing growth. According to Statistics Canada, real estate agents and brokers saw a 5.1% increase in activity that month, the largest monthly jump since October 2024. The spring housing market was warming up after an extended cold snap in provinces like Ontario and British Columbia.

The construction, manufacturing, and finance and insurance sectors also grew for a second consecutive month, while the public sector expanded in May. April's GDP figures were revised to 0.6%, with Statistics Canada estimating a 0.2% gain in June due to expected growth in wholesale, retail trade, and finance and insurance.

The advance estimate suggests real GDP will rise 3.4% on an annualized basis in the second quarter, beating the Bank of Canada's forecast of 2.5%. TD Bank economist Marc Ercolao said recent data does not show evidence of a meaningful downturn, attributing the first-quarter decline to temporary drags and volatility.

BMO chief economist Doug Porter expects growth to moderate in the second half of the year from the second quarter's robust pace, citing high fuel costs and U.S. President Donald Trump's tariff threat against Canada as factors that could put a chill on growth.