| Consensus | Consensus Range | Actual | Previous | Revised | |
| Month over Month | 0.0% | 0.0% to 0.1% | 0.0% | 0.3% | 0.4% |
| Year over Year | 1.4% | 2.0% | 2.1% |
Highlights
Economic activity stalled in July, as expected by forecasters in an Econoday survey, following a 0.4 percent expansion in June, revised up from 0.3 percent. Growth was flat in both services and goods-producing industries on the month. On a 12-month basis, economic growth slowed to 1.4 percent from 2.1 percent.
The advance estimate for August points to a modest 0.2 percent recovery from July.
Today's data do not reflect the impact of the collapse of trade negotiations between the U.S. and Canada since August 21, which has led to higher tarifs and countertariffs, which could lead the Bank of Canada to lower its growth outlook.
In a September 21 speech, Governor Tiff Macklem said,"If these new tariffs remain in place, growth could be roughly halved in the fourth quarter, to below 1%." The most recent projections date back from July, with an annualized GDP growth of 1.5 percent in the third quarter.
While overall growth was unchanged on the month, details show a more divided picture, with declines across 10 of 20 industrial sectors.
In services, decreases of 0.4 percent in wholesale trade and 1.0 percent in retail trade weighed on the overall performance in services. Gasoline and fuel vendors saw activity decline 3.5 percent on the month, coinciding with rising gas prices during the peak travel season. Advance information points to higher retail trade in August. In the public sector, public administration was down 0.3 percent after four consecutive months of increases.
Within goods-producing industries, manufacturing contracted 0.9 percent, undoing an increase of the same magnitude in June, with nondurable manufacturing down 1.3 percent and durables down 0.5 percent.
Mining, quarrying, and oil and gas extraction was down a further 0.5 percent, although preliminary data for August point to an increase in mining and quarrying in August. Oil and gas extraction, by contrast, is set to contract. Activity in the energy sector declined 0.5 percent in July and 1.0 percent in June.
Gains of 1.3 percent in construction and 1.7 percent in utilities offset decreases in other goods-producing industries.
Overall industrial production was down 0.4 percent on the month after edging up 0.1 percent in June.
Market Consensus Before Announcement
Forecasters agree with the Statistics Canada preliminary estimate saying GDP was flat in July.
Definition
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.
Description
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.