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Canada July GDP Slows More Than Expected On Weak Goods Sector

By Yali N'Diaye
     OTTAWA (MNI) - Canada GDP was unchanged in July after rising 0.3% in June,
the weakest performance since October 2016, slowing more than analysts had
expected due to a 0.5% contraction in goods-producing industries.
     The services sector, on the other hand, continued its consistent expansion
at a steady pace of 0.2%.
     Analysts in a MNI survey had expected GDP to increase 0.1% in July.
     The flat performance brought down the 12-month growth rate to 3.8% from
4.4% in June.
     The Bank of Canada has already factored in a slowdown in teh second half of
this year after a surprisingly strong first half culminating with a 4.5% second
quarter GDP growth that BOC Governor Stephen qualified as "huge".
     Within the goods sector, all major categories were down on the month,
except utilities (+1.7%), which benefited from higher demand for electricity in
Western Canada due to hot and dry weather, the agency said.
     Manufacturing output was down 0.4% in July, its first contraction since
February, led by a 0.9% decrease in durable manufacturing, while non-durable
industries were up 0.3%. Construction declined 0.5%, its largest drop since
October 2016.
     Meanwhile, oil and gas extraction decreased 1.8%, more than offsetting a
0.9% gain in mining, leading to a 1.2% drop in mining, quarrying, and oil and
gas extraction.
     Overall, energy was down 0.8% on the month, the largest decline since
October 2016.
     Excluding energy, GDP edged up 0.1%.
     On the services side, wholesale trade was particularly strong, recording a
2.0% gain on the month, the largest since September 2014, while finance and
insurance was down 0.6%, the largest decline since April 2015.
     Retail trade edged down 0.1%, dragged down by gasoline stations (-3.0%).
--MNI Ottawa Bureau; +1 613 869-0916; email:

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