Canada’s economy stalled in July - analysts did not expect this. This raises concern the nation is greatly affected by the broader global slowdown. Gross domestic product was unchanged in July from a 0.2 per cent gain in June, Statistics Canada said Tuesday from Ottawa. A drop in oil and gas extraction was the main contributor to the slowdown in GDP, falling 3 per cent in July, the largest monthly decline since 2016. The latest GDP reading may increase pressure on the Bank of Canada to cut rates. There are increasing worries that greater global economic uncertainty is beginning to affect Canada’s economic expansion.
A slowdown in mining, quarry and oil and gas extraction was responsible for the majority of the decline, contracting 3.5 per cent in July. This was the largest decrease for the industry since May 2016. The shutdown of some of Newfoundland and Labrador’s offshore production facilities for maintenance issues negatively impacted oil and natural gas activity in July. On an annual basis, output rose 1.3 per cent in July.
After stalling for two consecutive quarters, Canada’s economic activity increased by a stellar 3.7 per cent in the second quarter of this year.