Canada’s GDP Flat in July as Oil and Gas Extraction Contracts

Canada’s economy was unexpectedly unchanged in July, following four months of growth, as the country’s mining, quarrying and oil and gas extraction sectors contracted, Statistics Canada data showed on Tuesday.Analysts in a Reuters poll had predicted an increase of 0.1% in July following a 0.2% increase in June. Overall, 12 of the 20 industrial sectors monitored expanded on the month, while eight declined, the national statistics agency said.

Tuesday’s data comes as Canada is in the midst of a national election set for Oct 21 – where economic issues, like the cost-of-living, have played a central role on the campaign trail. Meanwhile, the Bank of Canada has held interest rates steady since last October as it monitors Canadian economic data.

Goods producing industries were down 0.7% in July as outputs from all sectors – excepting utilities – declined. Services-producing industries were up for the fifth consecutive month, rising 0.3% as the majority of its subsectors grew.

Canada’s mining, quarrying and oil and gas extraction sector dropped by 3.5% in July, the largest decrease seen since May 2016, Statistics Canada said. Support activities for those same industries slumped by 11.5%, the largest decline since December 2018, following three consecutive months of growth as drilling and lower rigging services contracted.

Oil and gas extraction (except oil sands) fell 4.7%, the biggest monthly decline seen in a decade, the agency said – thanks, in large part, to a shutdown of some offshore production facilities in Newfoundland and Labrador because of maintenance issues.

(Reporting by Kelsey Johnson, Editing by Dale Smith and Nick Zieminski)