Canada July GDP
- Prior was +0.6% m/m
- Best two months of growth for Canada since mid-2011
- +1.3% y/y vs +1.0% exp
That's a significant beat on Canadian GDP and should cool the talk of a BOC rate hike for now.
The jump is related to the drop in May GDP due to the fire in Alberta. What's tough to gauge is how much of that is real strength and how much is because production in Fort McMurrary was sped up.
"The output of goods-producing industries rose 1.0% in July, with mining, quarrying, and oil and gas extraction contributing the most to the gain," StatsCan reported. "The non-conventional oil extraction industry grew 19%, as production returned to normal levels following maintenance shutdowns in April and the Fort McMurray wildfire and evacuation in May."
That points to money spent in Alberta as the driver so I'm not sure the market will see this month as anything sustainable.
Still, there were good signs elsewhere with manufacturing output up 0.4% in July, driven by a gain in non-durable goods, especially chemical manufacturing.
One area of concern was construction. It fell 0.8% m/m in the fourth consecutive monthly decline. It's down 3.8% y/y.
Separately, Canadian industrial product price index -0.5% vs -0.1% m/m expected. Raw materials price index -0.7% vs -1.0% exp.
