The agency said a 0.5 percent growth in the manufacturing industry was “partially offset” by a 0.1 percent decline in the services industry.
Canada’s economy grew 0.1 percent in July, Statistics Canada said Thursday, September 29, after a similar 0.1 percent increase in June.
The latest real gross domestic product (GDP) data came in higher than expected as earlier estimates pointed to a 0.1 percent contraction.
Canadian GDP in July beat estimates by 0.1%m/m (a 0.1% decline forecast) despite big rate hikes at the BofC.
-August flash forecast shows GDP production flat.— Mike Eppel (@eppman) September 29, 2022
The agency said a 0.5 percent growth in the manufacturing industry was “partially offset” by a 0.1 percent decline in the services industry.
The mining, quarrying and oil & gas sectors rose 1.9 percent in July after slight declines in the previous two months. The economy also saw 3.2 percent growth in agriculture, forestry and fisheries, driven by an increase in crop production. However, manufacturing shrank 0.5 percent in July, the third decline in four months.
Also, the agency said the retail and trade sector fell to its lowest level since December 2021, shrinking 1.9 percent. Some of the biggest declines have been at gas stations and food and beverage outlets.
The hotel and restaurant industry shrank 1.0 percent, the first drop since January. Then the decline as a result of the more transmissible COVID-19 Omicron variant.
Even though The annual inflation rate slowed to 7.0 percent in AugustCIBC senior economist Andrew Grantham told The Canadian Press Contraction in the retail, accommodation and food sectors could mean high inflation and interest rates affect consumers more broadly.
The agency said steep inflation and rate hikes would continue to impact personal finances and real estate.
According to Statistics Canada, people are putting less money in savings accounts because of the higher cost of living. Meanwhile, housing and rental markets were broadly flat in July after four consecutive monthly declines.
The agency also said, based on preliminary information, that real gross domestic product (GDP) was “essentially unchanged” in August. An update will be provided in the next GDP report on October 28th.
Earlier this month, the The Bank of Canada raised interest rates for the fifth time this year, and warned that more rate hikes are on the way to bring inflation down to its 2% target – the benchmark rate is currently 3.25%. The central bank is expected to make its next interest rate announcement on October 26th.
With files from The Canadian Press.
