The economy edged up 0.1% in July after posting a solid gain of 0.4% in June. Over the past three months the goods producing sector has been the main source of growth.

Canada’s Gross Domestic Product got a boost in July from the manufacturing sector, wholesale and retail trade sector, and financial services sector. The oil patch, construction, and travel and tourism related services, held the reins on economic expansion. Industrial production (the output of Canada’s factories, mines and utilities) was up 0.3% in July. All components manufacturing, mining, and utilities were up (0.3%, 0.2% and 0.8% respectively). South of the border, the U.S. Index of Industrial Production indicated growth of 0.6% in July led by the manufacturing and mining sectors.

Manufacturing sector continues to expand

Output in the Canadian manufacturing sector was up 0.3% in July after a 1.6% export driven surge in June. Growth in manufacturing output was concentrated in wood products, fabricated metals, chemicals, ICT products, and motor vehicles. Growth was more concentrated than in June, as production was higher in only 11 of the 21 major groups. Sawmills were buzzing with production up 2.8% in July. Forestry and logging operations were also higher as the pine beetle infestation in B.C. prompted increased cutting. Lumber products were mostly exported to the U.S. to satisfy the continuing demand for housing. There were significant declines in the fabrication of textiles, petroleum products and non-metallic minerals.

The manufacturing of fabricated metals increased 1.3% with strong export demand for certain products. A 1.3% rise in the production of chemicals was mostly attributable to a 3.5% jump in pharmaceuticals. Manufacturing of ICT equipment had a good month, up 2.6% led by strength in the fabrication of semi-conductors, wireless communications and other electronic equipment. Production of automobiles and light trucks jumped 3.9% on the heels of a 2.2% increase in June, as exports to the U.S. remained strong. Some Canadian auto manufacturers lengthened summer shutdowns to reduce the building level of inventories for some models of car and trucks. Manufacturing of auto parts, fell 1.1%, marking a fourth consecutive monthly decline. Fabrication of heavy duty trucks declined 15% in July due to scheduled plant shutdowns.

Wholesalers and Retailers post a good month

Construction in a fourth consecutive month of decline

Activity in both residential and non-residential building receded in July for a fourth consecutive month. Residential construction was down 0.2% in July, largely due to a 3.5% decline in apartments. Housing starts were down in every region except Quebec which posted an 8.0% increase and New Brunswick where there was no change. The sale of existing homes was also lower, reducing business of real estate agents and brokers by 1.4%. Despite these declines, levels still remain high by historical standards.

Non-residential building fell 1.6% leaving output at 5% below March levels. The slowdown was felt in all building types with institutional down 2.1%, industrial down 3.0% and commercial down 0.5%. Non-residential building permits were down 13.3% overall and were only higher for institutional structures.

Mining, Oil and Gas Sector mixed

Other Industries