Canada reports flat economic growth in July after second-quarter rebound

Canada’s economic growth was flat in July, data showed on Tuesday, in line with expectations and signalling a slower start to the third quarter after a solid growth in the prior three months quarter.

This was after three straight months of positive growth and comes right before a new set of tariffs from the United States hit Canada in August.

Both the goods-producing industries and services-producing industries were largely unchanged in July, Statistics Canada said. The good-producing sectors contribute roughly a quarter of the gross domestic product.

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Among the goods-producing industries, the manufacturing sector decreased by 0.9 per cent in July, posting its first decrease in four months. This was primary led by a decline in activity at petroleum refineries, which was down 6.2 per cent in July.

The mining, quarrying and oil and gas extraction also posted a decline of 0.5 per cent, down for the second month in a row, Statscan said.

However, utilities and constructions sectors grew by 1.7 per cent and 1.3 per cent, respectively, offsetting most of the decline, the statistics agency said. The construction sector rose for a fourth consecutive month.

Among the services-producing industries, retail trade shrunk by 1 per cent and wholesale was down 0.4 per cent in July. The wholesale trade category was among the biggest contributors of growth in June.

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Professional, scientific and technical services rose 0.3 per cent in July, its largest monthly growth rate since in the last 20 months. Real estate, rental and leasing category grew by 0.2 per cent in July, with real estate expanding for the sixth consecutive month.

An advanced estimate from Statistics Canada showed that the economy was likely to post a rebound in August with a monthly growth rate of 0.2 per cent. The growth will primarily be led by higher output in mining and quarrying and retail trade, Statscan said.

The Bank of Canada has forecast an annualized growth of 1.5 per cent in the third quarter.