Canada's economy grew by 0.3 per cent per cent in July, buoyed by the manufacturing, wholesale trade and transportation sectors, Statistics Canada said Friday.
The July report was in line with the forecasts of many economists. According to Reuters, 21 economists they surveyed had a median forecast for growth for July of 0.3 per cent.
In June, the economy grew by 0.2 per cent.
For the April-June period, Canada's economy had its first quarterly decline since the recession of 2009. The country's gross domestic product fell 0.1 per cent during the quarter, or 0.4 per cent on an annualized basis.
Some economists are suggesting the current quarter could show growth of up to two per cent, meaning the country would avoid slipping into a second consecutive quarter of economic contraction. Two straight quarters of contraction are considered a technical recession.
"While this report largely pre-dates the onset of serious financial market turbulence — which began in earnest in late July—it does suggest the Canadian economy had some decent momentum heading into the turmoil," BMO Financial deputy chief economist Douglas Porter wrote in a commentary.
"The July gain builds in annualized growth of 1.3 per cent for all of [the July-September quarter] (i.e. assuming no change in the next two months, a tough constraint), heavily reducing the risk that Canada has somehow stumbled into a technical recession ahead of the rest of the world," Porter said.
Canada is not an island, cautioned TD Financial economist Leslie Preston, adding that monthly GDP is not expected to maintain the strength seen in July.
"We expect a rebound GDP in Q3 to be followed by modest growth in Q4 as recent financial turbulence weighs on business and consumer sentiment to pull some of the steam out of domestic spending," Preston said.
In July, the manufacturing sector growth increased 1.4 per cent from June, ending three months of declines. Statistics Canada said the sector's advance was broad, led by motor vehicles and parts, fabricated metals, machinery and chemical production.
Transportation and warehousing services grew 1.8 per cent, mainly due to a resumption of normal activity after the end of a labour disruption at Canada Post in June.
Wholesale trade was up by 1.5 per cent.
On the down side, activity in retail trade, mining, oil and gas extraction, construction, and the finance and insurance sector decreased.
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