July 2023 GDP Results Released

September 29, 2023 - Statistics Canada today released its calculation of July GDP. Total economic activity was unchanged from June, with services-producing industries up by 0.1% and goods-producing industries down by 0.3%. The construction sector was also relatively flat. Mining/quarrying and accommodation food services, which had been negatively impacted by forest fires in June, rebounded in July. Both import and export activity to countries other than the US were down due to a strike that closed 30 BC ports in July. Overall, the July figures point to a soft start to Q3. If slower economic activity helps rein in inflation, it is an argument for the Bank of Canada to hold off on further interest rate increases.

However, we still haven't seen a definitive end of inflation, with August's headline CPI posting a 4.0% increase year-over-year (significantly higher than June's 3.3%), and the Bank's preferred measures of inflation (CPI trim, medium and "supercore") also edging higher. Combined with StatsCan's flash forecast of 0.1% economic growth in August, we believe it will be touch-and-go whether the Bank hikes its rate in October.

You can read the StatsCan release here.