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Canada’s real GDP rose 0.2% in July, exceeding forecasts and reversing June’s 0.1% drop, Statistics Canada reported. The rebound follows an annualized 1.6% contraction in Q2 as analysts watch for signs of recession.
Key drivers of July’s growth:
Goods-producing industries led the gain with a 0.6% increase after three months of losses. Mining, quarrying, and oil and gas extraction climbed 1.4%, driven by a 2.6% jump in metal ore mining and a 0.9% rise in oil and gas output. Oil sands extraction gained 1.2% as facilities ramped up production after spring maintenance.
Manufacturing rose 0.7% after falling sharply in June. Durable-goods manufacturing advanced 1.0%, led by transportation equipment (+3.2%), with motor vehicle assembly up 9.1% and parts up 10.5%. Non-durable goods grew 0.4%, boosted by a 12.6% surge in pharmaceuticals.
Services edged up 0.1%. Wholesale trade gained 0.6% on stronger vehicle and building-materials sales, while real estate rose 0.3% on higher home resales in Ontario and British Columbia. Retail trade dragged overall growth, falling 1.0% as food, clothing and sporting goods stores posted steep declines, partly offset by a 2.4% increase in non-store retailers. Transportation and warehousing rebounded 0.6%, with pipeline transportation up 2.8% on stronger crude and gas exports.
Outlook & currency reaction:
A flash estimate shows GDP was flat in August as wholesale and retail gains were offset by declines in mining, manufacturing, and transport. Official data are due October 31.
The Canadian dollar was little changed near 1.3950 against the U.S. dollar after the data release. Analysts say the report suggests Canada is avoiding a recession for now but faces continued pressure from tariffs and trade disruptions.
