(Bloomberg) -- Canada's economy got a boost from a strong pick up in manufacturing, recording faster-than-expected growth in July.
Gross domestic product expanded by 0.2 percent, Statistics Canada said Friday from Ottawa, versus economist projections of a 0.1 percent gain. Factories production increased 1.2 percent, that sector's biggest monthly gain this year.
While there has been a slowdown from 2017's Group of Seven- beating expansion, the numbers are consistent with an economy that continues to grow at a robust pace. July output figures are 2.4 percent higher than a year ago -- the 18th month of above 2 percent year-over-year gains.
Most analysts believe 2 percent growth is the top speed limit for the nation's economy, before it begins to generate inflation. Which is why the Bank of Canada has been gradually raising interest rates.
The numbers would have even been better had there not been production disruptions this summer at the Syncrude oil-sands operation, which went down after a power outage. Oil and gas extraction dropped 1.2 percent in July, after a 1.2 percent decline in June. That was the largest back-to-back monthly drop for the sector in two years.
Other Highlights- Twelve of 20 sectors posted gains in July
- Goods-producing industries expanded by 0.3 percent, while services output was up 0.2 percent
- The manufacturing gains were led by producers of non- durable products, with that segment posting a 2.4 percent gain, its strongest monthly gain in four years
- Utilities saw their out increase 2.1 percent, the largest monthly gain since 2016, as hot weather increased demand for electricity
- Wholesalers and transportation also posted strong gains for the month
- The real estate, rental and leasing component posted a 0.3 percent gain, as the housing market shows signs of a rebound. Construction, however, declined in July
--With assistance from Erik Hertzberg.
To contact the reporter on this story: Theophilos Argitis in Ottawa at targitis@bloomberg.net
To contact the editors responsible for this story: Theophilos Argitis at targitis@bloomberg.net, Stephen Wicary
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