Canada's economy grows only 0.2% in July

Economic activity increased 0.2% in July, its average pace since the beginning of 2007, after growing 0.2% in June and 0.3% in May.
Canada's National Statistical Agency 9/28/2007 8:02:07 AM

A significant increase in wholesale trade propelled the growth in July, while a drop in oil and gas extraction dampened it.

The strength of the service industries (+0.3%) more than offset the 0.1% decrease in the production of goods. Gains were registered in manufacturing, construction, oil and gas exploration, and the financial sector. Declines were recorded in the forestry, retail trade, utilities, and accommodation and food services sectors.

Wholesale trade rises sharply

Wholesale trade jumped 2.3% in July, the largest monthly increase recorded since its 4.4% gain in March 2004. A surge in motor vehicle sales (including parts), combined with significant increases in sales of machinery and equipment and of personal and household products, drove this sector in July. These gains were reduced slightly by declines in the wholesaling of food and farm products.

Manufacturing activities advance
The manufacturing sector rose 0.4% in July, continuing an upward trend that started at the beginning of 2007. Production of both durable (+0.6%) and non-durable (+0.2%) goods contributed to the increase. Of the 21 major manufacturing groups, 12 of these, accounting for 59% of this sector's value added, saw increases.

Significant gains were made in motor vehicle manufacturing and associated parts production. The manufacturing of computer and electronic products, as well as paper and printing products also recorded gains. However, the production of beverages and wood products declined, as did the manufacturing of machinery.

Industrial production (the output of mines, utilities and factories) decreased 0.2% in July. The increase in manufacturing was neutralized by the drops in mining and utilities. In the United States, industrial production increased 0.5% in July. Both manufacturing and mining moved ahead, while utilities fell.

Construction moves forward
The construction sector advanced 0.6% in July. Residential (+0.4%) and non-residential (+0.6%) building construction, along with engineering and repair work (+0.7%), all increased. The construction of single-family homes led residential construction. However, multi-unit structures fell back and apartment construction stalled. The construction of public buildings advanced, while industrial and commercial building construction stood still.

Evidence of increased repair activities on residential and non-residential structures was provided by the upward trend since the beginning of 2007 in wholesaling and retailing activities related to construction.

The home resale market continued to rise at a healthy pace in July, resulting in a 1.1% increase for the real estate agents and brokers industry.

Retail trade retreats
After a strong showing in May, retail trade experienced its second consecutive monthly decrease, down 0.8% in July and 0.7% in June. Sales by new car dealers fell in July. Sales of clothing and general merchandise stores (which include department stores), and of food and beverage vendors, also retreated. Gains were recorded by gasoline stations, home electronics and appliances, and pharmacies and personal care stores.

Other industries
Activities in the finance and insurance sector grew 0.6%. This increase was fuelled by a rise in lending activities and mutual fund sales in July. The forestry industry lost considerable ground (-4.4%), partially as a result of a major labour dispute. The accommodation and food services sector fell back 0.9% in July. The number of international travellers to Canada dropped 4.7%, particularly that of overnight visitors from the United States (-7.1%).