By Robb M. Stewart

OTTAWA--Canada's economy emerged from a rough winter on firmer footing, springing back to growth with a slight rise in activity last month on the heels of the strongest growth in nine months in April.

The rebound puts the economy on track to resume growing this quarter, following back-to-back contractions that raised concerns the country might be on the brink of recession.

Industry-level gross domestic product rose 0.5% from the month before in April, and Statistics Canada's advance data indicates output ticked up a further 0.1% in May.

"This isn't an economy in recession," Andrew DiCapua, principal economist for the Canadian Chamber of Commerce, said. "April's GDP rebound shows the economy is still chugging along, even if growth remains sluggish and not especially strong."

April's growth was stronger than the 0.4% expansion anticipated by economists, and the fastest pace since July. It came after activity shrank 0.1% in March, and the economy unexpectedly contracted 0.1% in annualized terms for the first quarter following a 1% decline in GDP in the last quarter of 2025.

The recovery, alongside indications that core inflation remains contained, supports the central bank's decision to ride out higher oil prices and leave interest rates steady.

The national data agency said early information for May showed increased activity in finance and real estate, partially offset by weakness in wholesale trade and agriculture and forestry.

The Bank of Canada has forecast annualized growth of 1.5% in the second quarter and 1.2% over the course of the year, though its projections are due to be updated with the governing council's next policy meeting mid-July. The council earlier this month again left the central bank's benchmark interest rate unchanged as members balanced risks to inflation and a struggling economy.

"This offers a nice set-up for the Bank of Canada's wholesale forecast reset," said Derek Holt, head of capital markets economist at Bank of Nova Scotia. "Spring has sprung and some of the categories of growth may reflect exit from hibernation following more adverse than normal weather over the winter."

Statistics Canada's industry accounts showed April's rebound was driven by a recovery in goods-producing industries and a third rise in a row for services producers.

Oil and gas extraction drove the economy in April with the strongest monthly growth since February 2024, which more than offset weakness the month before. Activity was up strongly in the oil sands sector of Western Canada following longer-than-anticipated unscheduled maintenance that had tempered growth through the first three months of the year.

Manufacturing similarly saw a recovery and construction picked up for the first time in five months. Growth was broad across a number of sectors, including transportation and warehousing, finance and insurance, and across the public sector with higher activity across all levels of government.

Economists estimate April's growth and the outlook for May put Canada's economy on a path toward annualized growth of more than 2%, which would be the strongest since the third quarter of last year.

A retreat in global oil prices in recent weeks limits the threat of inflation spreading beyond energy costs and eases the pressure this has put on household budgets. Still, continued uncertainty over trade with the U.S. and a slowdown in immigration remain headwinds for the economy. July 1 marks the official start of the review of the existing North American trade deal, though little movement is expected near term.

"For the Bank of Canada, this rebound supports the view that risks are fairly balanced. Higher inflation driven by temporary oil price spikes is one thing, but there isn't enough demand in the economy right now to suggest growth is about to reignite inflation," the Canadian Chamber's DiCapua said.

Write to Robb M. Stewart at robb.stewart@wsj.com