Canada’s economy lost momentum in July, with real GDP essentially unchanged after a revised 0.4% increase in June, in line with expectations for a flat month. Both goods-producing and services-producing industries were broadly unchanged, with 10 of 20 sectors expanding. The composition was mixed rather than uniformly weak, as construction and utilities offset declines in manufacturing, mining and trade. Statistics Canada also revised monthly GDP data back to January 2025 with this release.
Construction rose 1.3%, extending its expansion to a fourth consecutive month, with all subsectors advancing. Non-residential building construction jumped 2.9%, while residential construction increased 0.9%. Utilities also rose 1.7%. These gains were offset by a 0.9% contraction in manufacturing, including a 5.7% drop in petroleum and coal products, while mining, quarrying and oil and gas extraction fell 0.5%. Retail trade declined 1.0%, with weakness across most subsectors, while wholesale trade slipped 0.4%.
The flat July reading therefore looks more like a pause in growth than evidence of a broad contraction, particularly given the preliminary signal for the following month. Statistics Canada’s advance estimate indicates that real GDP increased 0.2% in August, as gains in mining and quarrying and retail trade were partly offset by weaker oil and gas extraction. That leaves the recent sequence at 0.4% growth in June, no change in July and an estimated 0.2% increase in August, suggesting activity regained some momentum after July’s stall.
Data Summary
| Indicator | Previous | Current | Expected |
|---|---|---|---|
| Real GDP, m/m | +0.4% | 0.0% | 0.0% |
| August advance estimate, m/m | — | +0.2% | — |
June was revised to +0.4%, while July was essentially unchanged. Statistics Canada’s preliminary estimate points to +0.2% growth in August.
Key Components
| Sector | July change |
|---|---|
| Construction | +1.3% |
| Utilities | +1.7% |
| Manufacturing | -0.9% |
| Mining, quarrying and oil & gas extraction | -0.5% |
| Retail trade | -1.0% |
| Wholesale trade | -0.4% |
| Professional, scientific & technical services | +0.3% |
| Real estate, rental & leasing | +0.2% |
| Accommodation & food services | +0.8% |
Construction expanded for a fourth consecutive month, while manufacturing, resources and trade offset much of that strength.
Key Takeaways
- Canada’s real GDP slowed from +0.4% in June to 0.0% in July, matching expectations for a flat month.
- The weakness was mixed rather than broad-based: 10 of 20 sectors expanded, while both goods and services were essentially unchanged overall.
- Construction was the main source of strength, rising 1.3% for a fourth straight month, with non-residential construction up 2.9%.
- Manufacturing fell 0.9%, partly reflecting refinery disruptions, while mining, quarrying and oil and gas extraction declined 0.5%.
- Retail trade dropped 1.0%, providing the clearest sign of softer consumer-facing activity in July.
- The August advance estimate of +0.2% suggests July’s stall did not immediately turn into a broader contraction.
- Overall, the release points to a pause in growth rather than a clear downturn, with construction resilience and the August rebound estimate offsetting July’s manufacturing and retail weakness.
