Canada's Economy Flatlines in July as Recovery Looms

Canada's economy remained stagnant in July, marking a slower start to the third quarter after three consecutive months of growth. The flat performance was in line with expectations and came before a new set of tariffs from the United States hit Canada in August.

The data showed that both goods-producing and services-producing industries were largely unchanged in July. Goods-producing sectors contribute approximately a quarter of gross domestic product, while services-producing industries account for the remaining three-quarters.

Among goods-producing industries, the manufacturing sector decreased by 0.9% in July, with a significant drop in activity at petroleum refineries contributing to this decline. In contrast, utilities and construction grew by 1.7% and 1.3%, respectively, offsetting most of the decrease.

Among services-producing industries, retail trade shrank by 1% and wholesale trade fell 0.4%. However, professional, scientific, and technical services rose 0.3% in July, their largest monthly growth rate in the past 20 months.

An advanced estimate from Statistics Canada showed that the economy likely rebounded in August, with a monthly growth of 0.2%. The growth will primarily be driven by higher output in mining and quarrying and retail trade.