Real gross domestic product (GDP) grew 0.5% in April, after contracting 0.1% in March, on strength in both goods-producing and services-producing industries, reported Statistics Canada on Tuesday.
And it said advance information indicates that real GDP by industry increased 0.1% in May.
Goods-producing industries rose 1.2% in April, reflecting growth in most sectors and driven by mining, quarrying, and oil and gas extraction. Services-producing industries grew 0.3%, rising for the third month in a row, driven by growth in the public sector and transportation and warehousing. Overall, 14 of the 20 industrial sectors grew in April, explained the federal agency.
It said the mining, quarrying, and oil and gas extraction sector rose 2.9% in April, the largest monthly growth rate since February 2024 (+3.2%), more than offsetting March’s 1.4% contraction. This third increase in four months was driven by increases in oil and gas extraction, along with support activities for the mining, and oil and gas extraction subsectors.
The public sector aggregate (comprising educational services, health care and social assistance, and public administration) expanded 0.4% in April, on widespread increases across all comprising sectors, added Statistics Canada.
“Public administration (+0.7%) was the largest contributor to the growth for the second consecutive month in April, with higher activity across all levels of government in the month. Federal government public administration (except defence) (+0.6%) posted its first increase in four months while defence services (+0.7%) recorded its seventh consecutive monthly increase. Health care and social assistance (+0.2%) as well as educational services (+0.4%) further added to growth in the public sector,” it said.
“The manufacturing sector rose 0.6% in April, driven by expansions in durable-goods manufacturing industries.
“Durable goods manufacturing industries expanded 1.1% in April, more than offsetting the decline recorded in March. The machinery manufacturing subsector (+3.0%) led the rebound, on strengths in the metalworking machinery manufacturing and industrial machinery manufacturing industry groups, coinciding with higher exports of industrial machinery, equipment and parts. Wood product (+2.6%) and non-metallic mineral product (+5.9%) manufacturing further added to the growth.
“Non-durable goods manufacturing was unchanged in April. Petroleum and coal product manufacturing (+5.8%) expanded for the third consecutive month in April, reflecting ramped-up production in petroleum refineries (+5.6%) and petroleum and coal product manufacturing (except petroleum refineries) (+7.5%). The increase coincided with higher exports of refined petroleum energy products in April. Fully offsetting the growth was a 6.8% contraction in chemical manufacturing.”
Andrew Grantham, Senior Economist, CIBC Capital Markets, said a healthy rebound in GDP growth in Q2 was expected.
“However, this is probably stronger than the underlying pace of growth within the economy, with Q2 flattered somewhat by a rebound in mining, oil & gas, as well as potentially a boost from FIFA World Cup spending and preparations. Because of that we could see growth slow to a slightly more modest pace in Q3, and we continue to see the need for interest rates to remain at current levels to support a sustainable recovery,” he noted.
Marc Ercolao, Economist, TD, said: “April’s stronger-than-expected print points to a better handoff into the second quarter with Q2 growth now tracking above 2.0% annualized. Zooming out, that leaves the first-quarter stumble looking more like a temporary soft patch than the start of a deeper downturn, broadly in line with the Bank of Canada’s view that growth should resume in Q2 even if the economy remains in excess supply.
“The bigger message here is that this reading should take some air out of the recent “technical recession” narrative. The economy is grinding through a soft patch, but household demand is still providing support to activity, while trade exposed industries are pointing to a tentative recovery. For the Bank of Canada, this argues for patience rather than a pivot. Firmer near-term growth lowers the urgency to ease, while inflation pressures that remain contained for now give the Bank cover to stay on the sidelines.”
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