Canadian GDP unchanged in July
Canada's economy was essentially unchanged in July, Statistics Canada says, as a slowdown in the mining, and oil and gas industries was offset by an uptick in manufacturing and the public sector.
The flat showing was the first month without growth since December when the Canadian economy shrank by 0.4 per cent, the data agency said.
The mining, and oil and gas industry shrank by 1.5 per cent in July. Manufacturing expanded by one per cent and the public sector by 0.5 per cent.
Economists had been expecting slight growth of about 0.3 per cent, so the showing was a disappointment, especially after there were signs of the economy heating up earlier in the summer after a bitterly cold winter across Canada that put a chill on growth.
"North America’s autos rebound wasn’t enough to make up for weakness in the natural resources sector in July," Scotiabank said in a note to clients.
The monthly figure means Canada's economy is chugging along much more slowly than its southern neighbour, where business is booming.
The latest data out of the U.S. shows the American economy was expanding at a 4.6 per cent pace heading into the summer.
"The latest GDP data suggests that the economy had less underlying momentum at the start of this quarter than most had expected," David Madani of Capital Economics said of the Canadian numbers. "Accordingly, this reinforces our view that the Bank of Canada will be in no hurry to raise interest rates anytime soon."
Others had a more upbeat tone, with TD Bank economist Randall Bartlett noting that strength in the U.S. is bound to spill over and boost Canadian exporters eventually.
"We do not see it as the beginning of a return to sub-par economic growth," he said. "Not only is output in the primary industries notoriously volatile on a month-to-month basis but many of the factors that have contributed to Canadian economic momentum recently, notably rising U.S. export demand, remain in place."
The weak showing also weighed on the Canadian dollar, which touched new lows after the news came out. When North American stock markets opened on Tuesday, the loonie was down about a fifth of a cent to 89.40 cents US, the lowest it's been since March.
Before that, the loonie hadn't been below the 89 cent level since the recession of 2009, when it dipped as low as 78 cents US.