Canada’s GDP stalls in July after three months of growth

Canada’s expansion hit a wall in July. Statistics Canada says real GDP by industry was essentially unchanged (0.0%) after three consecutive monthly gains — including June’s 0.4% and May’s 0.3% — with only 10 of 20 industrial sectors expanding. Goods and services both flatlined as construction and utilities gains cancelled manufacturing, mining and trade losses.

Construction rose 1.3% for a fourth straight month, led by non-residential building (+2.9%) — partly a new Ontario hospital — and engineering (+1.5%). Utilities jumped 1.7% on a July heat wave that lifted electricity demand. Manufacturing fell 0.9%, its first drop in four months, with petroleum and coal products (−5.7%) hammered by unplanned downtime at a southwestern Ontario refinery. Mining, quarrying and oil and gas extraction slipped 0.5%, including potash (−6.4%).

Retail trade dropped 1.0% and wholesale 0.4%, reversing much of June’s strength; gasoline stations (−3.5%) and general merchandise (−2.2%) led the retail retreat as pump prices spiked. Advance information points to a 0.2% rebound in August — mining and retail up, oil and gas down — before the tariff shock of late August fully shows in the monthly books.

Q2’s 3.3% annualized rebound already looks like the high-water mark. A flat July and a thin August flash are the soft start to a Q3 that trade war risk is supposed to slow further. Soft monthly GDP is not soft CPI — and it is exactly the mix that keeps the Bank of Canada debating hold versus hike into October.