OTTAWA—Looking to shake off its slump, the Canadian economy grew for a second consecutive month in July, helped by a continuing rebound in the oil sands following slowdowns related to maintenance and forest fires.
Statistics Canada said Wednesday, Sept. 30, that real gross domestic product grew 0.3 percent in July, topping the 0.2 percent growth economists had expected, according to a consensus forecast compiled by Thomson Reuters.
However, the federal agency revised downward its result for June to show growth of 0.4 percent compared with an initial reading of 0.5 percent.
BMO senior economist Benjamin Reitzes said in a report that GDP growth for the third quarter is tracking on a range of 2.5 to 3.0 percent.
“The back-to-back gains in GDP [in June and July] suggest that the economy rebounded firmly from the very weak first half of 2015,” Reitzes said.
Canada briefly fell into recession in the first half after five consecutive months of contraction produced two quarters of negative growth.
Growth in June reversed the trend and many economists expect the economy to perform better in the second half of the year. However TD Bank economist Diana Petramala cautioned that while the third quarter was looking stronger than expected, questions remain about whether the pace will be sustained in the last three months of the year.
“The rebound in oil-related sectors has been actually quite strong as well, but oil prices took another leg down in July so some of that optimism might be temporary heading into August and September,” she said.
The economic report came in the midst of a federal election campaign that has featured the economy as a key issue for all the parties.
Conservative finance minister Joe Oliver touted his government’s plan.
“Canada is going to have solid strong growth in the second half of the year and experience positive growth for the full year,” Oliver said.
Driving the growth in July was a 9.1 percent improvement in non-conventional oil extraction, which includes the Alberta oilsands, following a 7.0 percent gain in June. The move follows maintenance shutdowns and production difficulties earlier this year. Conventional oil and gas extraction was up 0.8 percent in July compared with June.
Meanwhile, manufacturing output rose 0.6 percent in July, while the finance and insurance sector rose 0.8 percent for the month.