Canadian GDP grows 0.2% in July, ending four-month slide
Investing.com — Canada’s economy posted modest growth in July, with real gross domestic product rising 0.2%, its first positive movement in four months. The rebound was led by a robust recovery in goods-producing industries, which expanded by 0.6% after three straight months of contraction.
Mining, quarrying, and oil and gas extraction registered the strongest gains, increasing 1.4% in July on broad-based growth across all subsectors. Notably, oil sands extraction rose 1.2% as facilities resumed full operations post-maintenance, while extraction outside the oil sands climbed 0.6% with higher natural gas and crude output.
The manufacturing sector expanded 0.7%, reversing part of June’s 1.5% contraction. Durable goods rose 1.0%, fueled by transportation equipment manufacturing, which benefited from a sharp uptick in vehicle and parts exports despite seasonal slowdowns and new U.S. tariffs.
Conversely, the impact of U.S. trade policy weighed heavily on Canada’s steel industry. Activity in iron and steel mills and ferro-alloy manufacturing fell 19.1% in July, its steepest drop since April 2020, following a June tariff hike to 50% on some Canadian exports. Moreover, overall export volumes of key steel commodities have fallen over 30% since February.
Transportation and warehousing grew 0.6%, largely from a 2.8% surge in pipeline operations amid increased exports of oil and gas. Support activities for transportation also posted strong gains, reflecting rising activity at LNG Canada’s Kitimat facility, which fully commenced operations in July.
Service-producing sectors edged 0.1% higher, buoyed by a 0.6% rise in wholesale trade and 0.3% growth in real estate and rental and leasing. However, retail trade fell 1.0% as households pulled back from food, clothing, and leisure spending, undercutting broader service-sector momentum.
Advance estimates for August point to a flat GDP reading, as a pullback in mining, manufacturing, and transportation offset gains in wholesale and retail trade. With more definitive data expected at the end of October, policymakers are closely watching whether July’s uptick marks a lasting trend or a brief reprieve.
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