Canada: GDP data signal firmer second quarter – RBC

Royal Bank of Canada (RBC) economist Abbey Xu notes that Canadian Gross Domestic Product (GDP) rose 0.5% in April, beating Statistics Canada’s 0.4% advance estimate and marking the strongest monthly gain since July 2025. Goods-producing industries, especially mining, quarrying and Oil and gas extraction, led gains, with services expanding more moderately. Xu highlights that recent data track some upside risk to Royal Bank of Canada’s (RBC) 1.7% annualized Q2 GDP forecast, but stresses that trade uncertainty and goods-sector headwinds mean the Canadian economy is still expected to grow only at a modest pace in coming months.

Modest growth outlook

"Canadian economic activity increased 0.5% in April, slightly higher than Statistics Canada's 0.4% advance estimate and marking the strongest monthly gain since July 2025."

"The stronger April reading points to a firmer start to the second quarter after growth stalled over the winter."

"While uncertainty surrounding U.S. trade policy continues to weigh on the outlook, the latest data are broadly consistent with our view that underlying economic conditions continue to improve modestly on a per-person basis rather than signaling a material shift in underlying momentum."

"That said, as-reported today's data is tracking some upside risk to our forecast for a 1.7% (annualized QoQ) increase in Q2."

"Overall, the April report points to a firmer start to the second quarter following a weak first quarter."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)