Canada's economic growth unchanged in July, August likely to expand 0.2%

By Reuters News8 hours ago Updated

The fruits and vegetables section is seen at a supermarket in Ottawa , Canada July 13, 2022. REUTERS/Patrick Doyle

By Promit Mukherjee

OTTAWA, Sept 29 (Reuters) - Canada's economic growth was flat in July, data showed on Tuesday, in line with expectations and signaling 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.

Here are the details:

- 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.

- Among the goods-producing industries, the manufacturing sector decreased by 0.9% 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% in July.

- The mining, quarrying and oil and gas extraction also posted a decline of 0.5%, down for the second month in a row, StatsCan said.

- However, utilities and constructions sectors grew by 1.7% and 1.3% 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% and wholesale was down 0.4% in July. The wholesale trade category was among the biggest contributors of growth in June.

- Professional, scientific and technical services rose 0.3% in July, its largest monthly growth rate since in the last 20 months. Real estate, rental and leasing category grew by 0.2% 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%. 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% in the third quarter.

- Money markets are pricing in a rate hike of 25 basis points in December, even as most economists have called for no change in interest rates all through the year.

- The Canadian dollar was trading down 0.06% to C$1.4179 to the U.S. dollar, or 70.53 U.S. cents. Yields on the two-year government bonds were down 3.1 basis points to 2.567%.