The Canadian economy continued to nudge ahead in July, led by manufacturing and wholesale trade, pointing to a possible third-quarter bounce-back after a shrinking in the previous quarter.
Gross domestic product -- the broadest measure of economic activity -- grew 0.3% during the month, following a 0.2% increase in June, Statistics Canada said Friday.
"Manufacturing and, to a lesser extent, wholesale trade and transportation services were the main sources of growth," the federal agency said, while declines in sectors such as retail trade, mining and oil and gas extraction held overall gains in check.
The 0.3% advance in July’s GDP was in line with economists’ forecasts.
"This report predates the deepening financial market turbulence and will likely show 'what could have been' for the economy, with the U.S. debt limit non-sense and the euro debt crisis," Douglas Porter, deputy chief economist at BMO Capital Markets, said in a morning note.
Porter said the economy is still on track to grow at about a 2% annual rate in Q3, adding that would also leave GDP up 2.2% year-over-year "precisely what we expect growth to average for all of 2011."
Last week, the International Monetary Fund downgraded its outlook for Canada’s economic growth to 2.1% this year and 1.9% next, from its April estimates of 2.90% and 2.6%, respectively.
The Bank of Canada -- which has kept its benchmarket lending rate at a near-record low of 1% for more than a year -- expects a return to growth in the second half of this year, after the economy contracted 0.4% in the second quarter.
