Canada May GDP 0.3% Beats Forecasts, Second Straight Monthly Gain

Manufacturing rose 0.3%. Non-durable goods manufacturing posted a fourth consecutive monthly increase of 1.0%, with chemical manufacturing up 5.9% after three straight declines and pharmaceutical and medicine manufacturing jumping 9.4% on stronger exports. Durable goods manufacturing fell 0.2%, as declines in machinery (-2.2%), miscellaneous manufacturing (-7.5%), and electrical equipment, appliances and components (-4.0%) outweighed gains in fabricated metal products (+2.5%) and motor vehicle manufacturing (+4.7%).

The public sector added 0.3%, with gains across education, health care and social assistance, and public administration.

Preliminary data for June shows real GDP rising 0.2%, with increases in wholesale trade, finance and insurance, and retail trade partially offset by declines in utilities and agriculture, forestry, fishing and hunting. Statistics Canada will publish the official June industry-level data on August 28.

The May report marks the strongest two-month stretch since late 2024. The data gives the Bank of Canada room to keep rates on hold at its next decision, a scenario that would support the Canadian dollar.