Canadian economy accelerates in August: Statistics Canada

The Canadian economy grew 0.3 percent in August, prolonging its rebound after the economy contracted in June, the nation’s statistics department reported. Economists had projected the economy to grow 0.2 percent in August.

Almost all of the major industrial sectors reported growth in August Goods-producing industries rose 0.4 percent, led by the oil and gas sector. Oil and gas extraction grew 2.8 percent in August as a result of an increase in production. Alberta’s booming energy industry is a critical component of the Canadian economy. The province of Alberta ranks third in the world in terms of proven oil reserves, behind Saudi Arabia and Venezuela. Almost 99 percent of the province’s reserves are found in the oil sands, which are located in the northern part of the province.

Elsewhere, the service economy accelerated at a pace of 0.3 percent. Professional services, wholesale and retail trade, transportation and warehousing and accommodation and food services also registered gains, as the Canadian economy picked up momentum in the middle of the third quarter.

In contrast, utilities, manufacturing and financial services declined, whereas construction remained unchanged. Mining and quarrying activity unrelated to oil and gas extraction fell 1.1 percent as a result of slower potash and metallic mineral mining.

Canada was under pressure in June after flooding in Alberta and a prolonged construction strike in Quebec halted economic progress. Gross domestic product shrank half a percent in June, according to Statistics Canada. The June slowdown raised question marks about the True North’s economy, and whether it could hold firm in the face of economic uncertainty south of the border. In October the Bank of Canada cut its growth forecast into 2015, citing a lack of confidence in the US and global economies. Sluggish growth south of the border harms the Canadian export market, including the oil and gas industry.