Canada May GDP - Set for a healthy Q2
May Canadian GDP data clearly shows an economy returning to growth in Q2. The 0.3% increase was stronger than a 0.2% consensus and a 0.1% preliminary estimate made with April’s data. April was revised higher to a 0.6% rise from 0.5% and the preliminary estimate for June is a respectable gain of 0.2%.
This suggests a 0.8% increase in Q2 GDP, which would be around 3.2% annualized, above a recent 2.5% estimate made by the BoC.
May’s gain was led by a 0.6% rise in goods with mining, manufacturing, utilities and construction all showing a second straight gain after finishing Q1 on a weak note. Services saw a second straight rise of 0.2%, led by a second straight rise of 0.6% in public administration and a second straight 0.8% rise in accommodation and food services. Wholesale at -0.4% was the most significant restraint.
June’s gain is seen led by wholesale, finance and insurance, and retail, offset by weakness in utilities and agriculture, forestry, fishing and hunting. With utilities volatile this suggests underlying strength.
Yr/yr growth at 1.7% is the highest since July 2025, suggesting the economy is picking up from the tariff-hit, though another round of tariffs could delay the recovery. Minutes from the July 15 BoC meeting showed increasing confidence in a rebound in Q2 GDP, but differing opinions on whether it would be sustained.