Statistics Canada reported on Wednesday that real gross domestic product (GDP) grew by 0.3 percent in July, exceeding the 0.2 percent growth forecast in a Reuters survey of economists.
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The ONS also announced that growth for the whole economy in the second quarter was 0.7%, unchanged from the previous estimate.
Canada’s economy has now expanded for two months in a row in June and July after contracting for the first five months of the year.
The federal agency revised June’s gain down to 0.4 percent from 0.5 percent, mainly due to an upward revision in the dollar level of May’s GDP from the previous estimate.
“Prime Minister Stephen Harper, defending his policy of balancing the budget and constraining spending, said during the campaign that more than 80 per cent of the country’s industries have been growing this year”.
“Indeed, third-quarter GDP growth is tracking in the 2.5 per cent to 3 per cent range, consistent with our above consensus 2.8 per cent call”.
One thing this morning’s measure should do is help end talk of Canada being mired in recession.
Going forward in the second half of the year sure looks better than the first six months, though.
With these numbers in, many economists are now predicting that Canada will nearly double the 1.5-per-cent growth rate that the Bank of Canada had predicted for the third quarter.
Meanwhile, manufacturing output rose 0.6 per cent in July, while the finance and insurance sector rose 0.8 per cent for the month.
“In fact, there are a few more constructive forces at work which should see the economy gain at least temporary relief from the first-half growth stumble”, CIBC economist Nick Exarhos said in a lookahead to today’s report. The weaker currency makes Canadian goods cheaper in the U.S., which buys three-quarters of its northern neighbor’s exports.
‘But we still face risks from the global economy so we should continue working through our long-term plan to build a resilient economy’.
Poloz kept the central bank’s trend-setting overnight lending rate at 0.5 percent at the last decision on September 9, after cutting it in January and July.
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Statistics Canada said non-conventional oil extraction jumped 9.1 per cent in July, recovering from earlier this year when maintenance shutdowns and wildfires hampered production in Alberta’s bitumen deposits.
