Record oil and gas extraction boosted Canada's economy in August, according to Statistics Canada. (Todd Korol/Reuters)

The Canadian economy grew by 0.3 per cent in August, according to Statistics Canada, a larger jump than expected.

The federal agency says the growth was led by oil and gas extraction, which rose 2.8 per cent to a record $97.6 billion.

The growth in overall GDP follows a 0.6 per cent expansion in July and a 0.5 per cent decline in June.

The economy has grown in seven of the last eight months.

"A large component of the weakness in June reflected the temporary impact of the Alberta floods and a construction strike in Quebec," according to RBC assistant chief economist Paul Ferley.

"The rise in July and August reflected a more than full reversal of these negative factors."

Canada's manufacturing sector was weaker, with output declining by 0.3 per cent in August following a 0.9 per cent jump in July.

Economists were expecting economic growth of 0.1 per cent in August, according to a survey by Bloomberg.

The better-than-expected growth means the third quarter was likely a strong one for the Canadian economy, with annualized growth of 2.8 per cent expected by RBC Economics. The Bank of Canada has forecast annualized growth of 1.8 per cent between July and September.

In its monetary policy report released earlier this month, the Bank of Canada said it expects the Canadian economy to expand by just 1.6 per cent this year, a drop from an earlier forecast of 1.8 per cent.