Canadian GDP Rebounds as Mining and Manufacturing Spur July Growth

Canada's GDP grew by 0.2% in July after three months of contraction, driven by mining, manufacturing, and wholesale trade. Analysts are monitoring whether GDP can avoid a third-quarter contraction. Despite growth in goods-producing industries, services were weak and trade tariffs threatened economic stability.

Canada's gross domestic product (GDP) saw a modest increase of 0.2% in July, ending a three-month decline. This resurgence was largely fueled by improvements in mining, manufacturing, and wholesale trade sectors, according to data released on Friday. The nation's economy faced a 1.6% annualized contraction in the second quarter, raising concerns about a potential third-quarter contraction.

Statistics Canada noted that while August might maintain the status quo without growth or contraction, the preliminary figures could still be revised. In July, goods-producing industries, which account for about a quarter of the GDP, experienced a 0.6% surge, led by significant growth in mining, quarrying, and oil and gas extraction.

The service sector, contributing to three-quarters of the GDP, reported only a 0.1% increase. The economic outlook remains uncertain, however, as U.S. tariffs continue to strain key sectors, with potential ripple effects across the broader economy, according to the Bank of Canada.

(With inputs from agencies.)