The Canadian economy was up 0.2 percent in May, just above the modest 0.1 percent rise expected in the Econoday survey and the 0.1 percent Statistics Canada estimate. April was unrevised from the 0.3 percent showing initially reported. Year over year, the economy expanded by 1.1 percent in May.

The advance estimate for June points to an increase of 0.1 percent. The projection for June suggests growth remained muted at the end of the second quarter, and that growth in the second quarter as a whole expanded 0.5 percent, Statistics Canada said.

For May versus April, services were up 0.1 percent while goods-producing industries were up a better 0.4 percent. For April versus March, goods-producing industries were up 0.3 percent and services up 0.4 percent.

In May, 15 of 20 sectors increased on the month. Manufacturing led the way for a second straight month with a gain of 1.0 percent. The expansion in manufacturing was the biggest since January 2023 as durable and non-durable manufacturing both showed gains. Non-durables manufacturing jumped by 1.4 percent on the month, its largest since November 2023, propelled by oil and coal product manufacturing, up 7.3 percent as refineries returned from maintenance shutdowns in April.

On the downside, mining, quarrying and gas extraction retreated by 0.6 percent in May after rising 2.1 percent in April. Oil and gas extraction, down 2.1 percent, accounted for most of the decline, due mostly to maintenance at oil sands facilities in Alberta.

Retail trade was the biggest downer in May with a contraction of 0.9 percent after an uptick of 0.6 percent in April. Most retail subsectors declined, paced by a drop of 2.3 percent in food and beverage stores and 1.4 percent decreases in personal care stores and general merchandise. Wholesale trade also fell back by 0.8 percent in May after a 1.4 percent gain in April.

The public sector rose 0.4 percent in May, its fifth straight gain, after rising 0.2 percent in April.

After rebounding 0.3 percent in April following no change in March, GDP in May is expected to rise 0.1 percent.

Gross domestic product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. In contrast to most industrialised countries a monthly estimate is provided derived from the value added by labour and capital in transforming inputs purchased from other producers into that industry's output. Data for the reference month are usually released close to the end of the second month after the reference period.

Instead of producing an advanced quarterly GDP figure and revising it the following two months, Statistics Canada releases monthly estimates of real GDP at Basic Prices. This release breaks down real output by seven goods-producing industries and twelve service-producing industries, and includes special aggregations such as business sector, non-business sector, and industrial production.

The sources of data used for monthly and quarterly estimates often differ and leads to very different estimates for certain items, such as price deflators. As a result, the monthly figures are not perfectly correlated with the quarterly numbers. However, the monthly data do give some idea of where the quarter is headed and especially in an uncertain environment, they are closely watched. While industrial production is closely watched in the U.S., it is not in Canada especially since the economy has become increasingly dominated by services. However, the goods sector is more vulnerable to wide swings in output compared to services, and exports remain dominated by industrial output.