Canada: Economic activity growth stable in July
GDP rose 0.1% month-on-month in seasonally-adjusted terms in July (June: +0.1% mom). Looking at the details of the release, the agricultural and mining sectors grew at faster rates. In contrast, the manufacturing and services sectors contracted after having expanded in June.
On an annual basis, monthly GDP increased 4.3% in July, which was below June’s 4.6% expansion.
A flash estimate for August estimated growth at zero. Upturns in retail and wholesale trade and agriculture were offset by downturns in manufacturing and oil and gas extraction.
TD Economics’ James Orland commented on the outlook:
“Today’s GDP release surprised to the upside, with the materials sectors taking the lead on the back of high commodity prices. Though there was noticeable weakness in some consumer-facing sectors, today’s print combined with the August forecast reaffirms our tracking for the third quarter of around 1%. That’s pretty good considering the backdrop of high inflation and rapidly rising interest rates that are weighing on the economy.”