Canada: Economy recovers in April
GDP reading: GDP was up 0.5% on a seasonally adjusted month-on-month basis in April, following a 0.1% decline in the prior month. April’s reading was the strongest since July 2025.
Drivers: Goods-producing industries increased by 1.2% in April, supported by growth across most sectors and led by mining, quarrying, and oil and gas extraction. Services-producing industries rose by 0.3%, marking a third consecutive monthly gain, with the public sector and transportation and warehousing contributing most to the increase. In total, 14 of the 20 industrial sectors expanded in April.
GDP outlook: Advance estimates suggest that real GDP by industry rose 0.1% in May. Gains in finance and insurance, as well as real estate and rental and leasing, were partly offset by declines in wholesale trade and agriculture, forestry, fishing and hunting.
Panelist insight: Desjardins’ LJ Valencia said:
“Our tracking suggests real GDP growth of around 1.5% annualized in Q2 2026. This is broadly in line with the Bank of Canada’s outlook published in the April 2026 Monetary Policy Report. The report should put to bed any remaining speculation that Canada might be in recession. Only four sectors showed declines in April, which is the opposite of a recession pattern. And some of the idiosyncratic headwinds of Q1, notably around the energy sector, are now behind, while the sector benefits from the spike in demand from alternative suppliers in the wake of the Iran conflict. Despite the positive news, the path ahead is volatile. Geopolitical tensions in the Middle East External link. remain elevated. In addition, the outcome of the Canada-United States-Mexico joint review remains unknown.”