Canada’s economy continues rebound for second straight month

OTTAWA — The Canadian economy beat expectations in July with fresh data showing it expanded 0.5 per cent as the country continued moving away from a contraction earlier in the year.

Statistics Canada data released Friday for real gross domestic product found the month’s growth was largely tied to resumption of oilsands production.

It had been disrupted by massive wildfires that also forced the evacuation of Fort McMurray, Alta., in May.

This marked the second month of growth, following a 0.6 per cent gain in June. The increases followed contractions of 0.6 per cent in May and 1.6 per cent in the second quarter of 2016.

“Recent monthly GDP figures have been deeply skewed by the see-saw in oilsands output, but that story has now run its course,” Douglas Porter, chief economist with BMO Financial Group, said Friday.

“Importantly, the big bounce in July GDP has broken the narrative that the Canadian economy was sinking back into the mire, and will dampen down talk that the Bank (of Canada) would need to cut rates again soon — at least due to domestic factors.”

The Bank of Canada has predicted a third-quarter GDP rebound of 3.5 per cent thanks to oil production back online and reconstruction efforts in Alberta’s oilsands region.

Statistics Canada said there was a 19 per cent increase in non-conventional oil extraction, which includes oilsands. It was the driving force behind a 3.9 per cent increase in the overall mining, oil and gas extraction sector.

Conventional oil and gas extraction rose at a slower pace (0.6 per cent) while mining declined by 3.1 per cent.

The output of goods-producing industries overall rose one per cent in July, while output from service-producing industries advanced 0.3 per cent.