National

Economic growth in July could give way to stall in August: StatCan

Darpan News Desk The Canadian Press, 26 Sep, 2025 08:21 AM

The Canadian economy grew in July but any momentum may have been short lived, Statistics Canada said Friday.

Real gross domestic product grew 0.2 per cent in July, marking the first signs of growth in four months. Real GDP declined 1.6 per cent on an annualized basis in the second quarter.

The growth in July was a bit faster than economists' expectations heading into the release.

Statistics Canada said the growth in July was driven by goods-producing industries, which grew 0.6 per cent for the month.

TD Bank economist Marc Ercolao said in a note to clients Friday that gains in July were concentrated in sectors hit hard by U.S. tariffs, suggesting those industries are starting to stabilize after the trade shock.

The mining, quarrying, and oil and gas extraction sector added 1.4 per cent in July as mining and quarrying, except oil and gas, rose 2.6 per cent. The oil and gas extraction subsector grew 0.9 per cent in July.

The manufacturing sector grew 0.7 per cent as durable goods manufacturing grew 1.0 per cent. Non-durable goods manufacturing rose 0.4 per cent.

However, Statistics Canada noted in a special bulletin on the steel sector that U.S. President Donald Trump's move to double tariff levels on the industry in June hit metals manufacturers hard in July.

Activity in iron and steel mills and ferro-alloy manufacturing group was down 19 per cent in July, the agency said.

Meanwhile, services-producing industries edged up 0.1 per cent as the transportation and warehousing sector rose 0.6 per cent. The retail trade sector fell 1.0 per cent.

Statistics Canada's early estimates suggest the economy showed no growth in August.

Gains in wholesale and retail trade last month were offset by declines in mining and quarrying, oil and gas extraction, manufacturing and transportation and warehousing, the agency said.

"The Canadian economy took a slightly bigger-than-expected step forward in July, only to stumble again in August," said CIBC senior economist Andrew Grantham in a note to clients.

The Bank of Canada cut its benchmark interest rate by a quarter point to 2.5 per cent last week as policymakers said the balance of risks was shifting toward a weakening economy and away from rising inflation.

Even with the stronger July, activity for the third quarter is tracking slightly weaker than projections in the Bank of Canada's most recent outlooks, Grantham said.

He said that sets the central bank up for one more rate cut, perhaps as early as its decision at the end of October, depending on the inflation and labour market data still to come.

Ercolao also said he expects the Bank of Canada will cut again before the end of the year as growth rebounds modestly but slack remains in the economy.

Picture Courtesy: THE CANADIAN PRESS/Sean Kilpatrick

Prev Next

MORE National ARTICLES

Earthquake shakes Vancouver and other B.C. cities

An earthquake with a preliminary magnitude of 5.1 has shaken Vancouver, Victoria and other B.C. cities. Natural Resources Canada says the quake was centred 24 kilometres north-northeast of Sechelt on the Sunshine Coast.

Earthquake shakes Vancouver and other B.C. cities

Heiltsuk Nation written constitution passes with 67 per cent of votes

The Heiltsuk Nation has approved the adoption of a written constitution for the First Nation on British Columbia's central coast. The nation says 67 per cent of the 725 people who voted on the referendum were in favour of the constitution.

Heiltsuk Nation written constitution passes with 67 per cent of votes

Poilievre's proposed incentives for First Nations water, resource projects draw fire

Conservative Leader Pierre Poilievre says he would incentivize First Nations to support natural-resource projects through industry taxes and revisiting how much sway Indigenous Peoples and environmental considerations have over approving projects. The proposals drew swift criticism from some experts and researchers.

Poilievre's proposed incentives for First Nations water, resource projects draw fire

Indigenous kids in care more likely to experience poor health later in life: report

Indigenous people who were in government care as children experience poorer health and socioeconomic outcomes later in life than those who were never in care, a new Statistics Canada report says. They suffer higher rates of disability, lower self-rated health levels and more homelessness, and are more likely to struggle to meet basic household needs, the report says.

Indigenous kids in care more likely to experience poor health later in life: report

Ex-coroner says B.C.'s drug policy overhaul looks like 'impulsive political decision'

British Columbia's former chief coroner says she's disappointed by the province's overhaul of its program that provides prescription alternatives to toxic street drugs, a shift she says "feels like a really impulsive political decision." Lisa Lapointe said the move to a "witnessed-only" model in which people are supervised while consuming their prescription drugs appeared to ignore scientific evidence.

Ex-coroner says B.C.'s drug policy overhaul looks like 'impulsive political decision'

Internal military report blames botched shooter drill on poor organization

During the drill, which took place on Nov. 12 at a service depot at CFB Longue-Pointe in Montreal, military police also confused a racialized employee with a drill participant playing an active shooter and wrestled him to the ground.