Canada's GDP contracted 0.2 percent in June, as expected, as goods-producing industries were down another 0.4 percent on the month and services fell 0.2 percent after rising 0.4 percent in May.

The improvement in July was very limited based on Statistics Canada's preliminary estimate of a flat GDP.

Forest fires in Northern Quebec impacted several industries in June, forcing mine closures, suspending rail lines and limiting activity in recreational camps.

Activity contracted in 12 of 20 industrial sectors. Wholesale trade, which dropped 3.0 percent on the month, was the largest negative contributor to GDP. Activity contracted in seven other services, including a 0.6 percent decrease in retail trade and a 0.4 percent decline in transportation and warehousing. Accommodation and food services were down 0.6 percent. On the upside, real estate, and rental and leasing increased 0.3 percent, as did public administration.

Within goods-producing industries, weakness was widespread, with utilities down 1.1 percent, agriculture, forestry, fishing and hunting down 0.9 percent, construction down 0.6 percent and mining, quarrying, and oil and gas extraction down 0.3 percent. Mining and quarrying dropped 5.7 percent, the largest monthly contraction since November 2021. Iron ore mining plunged 35 percent, owing not only to fires but also maintenance that affected production in northern Quebec and Newfoundland and Labrador. By contrast, oil and gas extraction rose 1.1 percent in June, helping the energy sector increase 0.3 percent. Manufacturing was the only goods-producing subsector to avoid a contraction in June, as it was flat on the month, when a 0.4 percent increase in non-durables offset a 0.3 percent decrease in durables. Overall industrial production was down 0.2 percent in June.

After rising 0.3 percent in May, GDP in June is expected to fall 0.2 percent.

Gross domestic product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. In contrast to most industrialised countries a monthly estimate is provided derived from the value added by labour and capital in transforming inputs purchased from other producers into that industry's output. Data for the reference month are usually released close to the end of the second month after the reference period.

Instead of producing an advanced quarterly GDP figure and revising it the following two months, Statistics Canada releases monthly estimates of real GDP at Basic Prices. This release breaks down real output by seven goods-producing industries and twelve service-producing industries, and includes special aggregations such as business sector, non-business sector, and industrial production.

The sources of data used for monthly and quarterly estimates often differ and leads to very different estimates for certain items, such as price deflators. As a result, the monthly figures are not perfectly correlated with the quarterly numbers. However, the monthly data do give some idea of where the quarter is headed and especially in an uncertain environment, they are closely watched. While industrial production is closely watched in the U.S., it is not in Canada especially since the economy has become increasingly dominated by services. However, the goods sector is more vulnerable to wide swings in output compared to services, and exports remain dominated by industrial output.