Canada’s economy stagnated in June, with real gross domestic product remaining essentially unchanged following a 0.1% increase in May. The latest data from Statistics Canada reveals a mixed economic picture, with goods-producing industries experiencing their largest decline since December 2023.
The manufacturing sector was the primary driver of the downturn, contracting 1.5% in June and offsetting gains from the previous two months. Durable goods manufacturing saw its most significant contraction since April 2021, falling 2.4% to its lowest level since November 2021. The decline was largely attributed to a 3.5% drop in motor vehicle and parts manufacturing, impacted by retooling at U.S. assembly plants and production suspension at a Canadian facility.
Construction continued its downward trend for the third consecutive month, contracting 0.6% to reach its lowest level since January 2021. However, residential building construction showed a glimmer of hope, increasing 0.3% for its first rise in three months.
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On a positive note, the utilities sector expanded 2.3%, reaching its highest level since April 2023. This growth was primarily driven by increases in electric power generation and natural gas distribution.
The services sector continued its modest growth, increasing 0.1% for the third consecutive month. Notable gains were seen in real estate and rental and leasing (+0.3%) and finance and insurance (+0.5%).
Looking ahead, Statistics Canada’s advance estimate suggests GDP remained flat in July, with decreases in construction, mining, and wholesale trade offset by gains in finance and retail trade. Despite the recent stagnation, the overall economy expanded 0.5% in the second quarter of 2024, with 15 out of 20 industrial sectors showing growth.
Information for this story was found via Statistics Canada. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
