OTTAWA – The economy grew by 0.2 per cent in August, Statistics Canada said Tuesday, reinforcing expectations that the country is poised for a rebound in the third quarter.
The measure of real gross domestic product in August matched the expectations of economists, according to Thomson Reuters, and it came as the July figure was revised lower to show an increase of 0.4 per cent compared with an initial reading of 0.5 per cent.
Economists noted that the results so far put the economy on track for a strong bounce back for the third quarter after contracting in the second quarter due to the wildfires in Fort McMurray, Alta.
“The increase in August GDP builds further onto the outsized gains in July and June and point to third-quarter annualized GDP growth likely increasing 3.5 per cent,” Royal Bank assistant chief economist Paul Ferley wrote in a report.
“This outsized gain, though welcome, largely reflects the reversal of the temporary factors that weighed on oilsands production and sent second-quarter growth into negative territory.”
Goods-producing industries rose 0.7 per cent in August, boosted by the mining, quarrying and oil and gas extraction sector, which gained 1.4 per cent.
The mining excluding oil and gas extraction subsector increased two per cent, thanks in large part to a 14 per cent gain in potash mining on the back of higher exports. Metal ore mining fell 1.2 per cent.
The oil and gas extraction subsector gained 0.9 per cent as the non-conventional category gained 1.1 per cent and conventional oil and gas extraction increased 0.8 per cent.
Bank of Montreal chief economist Doug Porter said oil and gas output has reversed the losses it suffered at the start of the year and now stands almost precisely unchanged since the start of 2016.
“For the record, oil and gas output is now up 0.5 per cent from a year ago, although the broader mining category is down 2.8 per cent year-over-year due to weakness in metals and drilling,” Porter said.
The utilities sector rose 2.4 per cent, driven by demand for electricity, particularly in Ontario, due to heat waves in August.
Statistics Canada said the service-producing industries were essentially unchanged for the month. The finance and insurance sector and retail trade sectors lost ground.