In a turnaround from six months of near-stagnant activity, the Canadian economy expanded at an annualized rate of 3.3 per cent in the second quarter as per the latest data from StatCan. That marked its fastest quarterly pace since early 2023, and while the figure landed just below economist expectations, it was strong enough to reframe earlier fears of a downturn.
The gain came bundled with a revision that reshaped the opening months of the year. Statistics Canada, which reported the numbers Friday, had logged the first quarter back in May as a marginal contraction, a reading that stoked debate over whether Canada had slipped into a technical recession. That figure now stands at a positive 0.3 per cent annualized, meaning the two consecutive quarterly drops that typically define a recession never materialized.
Much of the momentum came from trade, with exports climbing 3.6 per cent on a rebound in auto shipments after production of passenger cars and light trucks fell in each of the previous two quarters. Residential investment lent additional support as the resale housing market heated over the spring, particularly in Ontario, Quebec and British Columbia.
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Capital spending by businesses rose 2.3 per cent, ending five straight quarters of decline. Outlays on machinery and equipment hit a two-year high, and investment in computers and peripherals jumped 16.7 per cent, tied to the processing units used in data centres.
June alone saw GDP rise 0.3 per cent, helped by the 10 FIFA World Cup games Canada hosted. The tariff-sensitive manufacturing sector expanded for a third straight month.
The report is the final major data release before the Bank of Canada’s next rate decision on Sept. 2.
