GDP largely unchanged in July: Statistics Canada
By The Canadian Press
By The Canadian Press
Economic growth in Canada paused in July following a string of gains over six consecutive months, hurt by a slump in the mining and energy sector, Statistics Canada said Tuesday.
Economists had expected a gain of 0.2 per cent, according to Thomson Reuters.
But the federal agency said the real gross domestic product was essentially unchanged in July following gains of 0.5 per cent in May and 0.3 per cent in June.
On a year-over-year basis, the economy was up 2.5 per cent.
BMO Capital Markets chief economist Doug Porter said “the Canadian economy seriously stubbed its toe in July.”
“While some special factors weighed, there were also some helpful one-time events in place as well, so we wouldn’t dismiss the weakness,” Porter said.
The flat month-over-month result overall came as the manufacturing and the public sector posted gains in July.
Manufacturing output grew one per cent. Durable-goods manufacturing rose 1.6 per cent, with increases in transportation equipment, computer and electronic products, as well as furniture and related products.
The public sector increased 0.5 per cent for the month.
The construction, professional services and retail trade sectors also posted gains.
However, those steps forward were offset by decreases in mining and oil and gas extraction, as well as in utilities.
Mining, quarrying and oil and gas extraction fell 1.5 per cent in July, while utilities dropped 2.3 per cent due to lower demand for electricity and natural gas due to cooler weather in some parts of the country.
Statistics Canada also said there were decreases in agriculture, wholesale trade, transportation and warehousing services, as well as arts, entertainment and recreation.
TD Bank senior economist Randall Bartlett said the unexpectedly weak result for the month puts some risk that the third quarter will fall short of the bank’s forecast for around three per cent annual growth, but added he did not see it as the beginning of a return to sub-par economic growth.
“Not only is output in the primary industries notoriously volatile on a month-to-month basis, but many of the factors that have contributed to Canadian economic momentum recently, notably rising U.S. export demand, remain in place,” Bartlett wrote in a note to clients.