GDP grew faster than expected in July: StatsCan

Canada's GDP grew more than three times as fast in July as economists had predicted, thanks to gushing oil and gas production, Statistics Canada said Tuesday.

The country's national statistical agency said gross domestic product jumped by 0.7 per cent in July compared with June, a much better performance than the 0.2 per cent private sector growth economists had been forecasting.

The stellar month was a marked contrast to May-to-June period, when the economy grew, on average, by 0.05 per cent.

Comparing Canada's performance this July with the same month last year, the national GDP posted a gain of 1.2 per cent.

Power surge

Increased energy production was a driving force underlying Canada's GDP gain in the month, Statistics Canada said.

"The energy sector, which has been trending down during the last four quarters, accounted for almost half of the July increase," the agency said in a press release.

Oil and gas production increased by 3.1 per cent in the month, according to Statistics Canada.

One big reason for the improved sectoral performance was the completion of maintenance at petroleum facilities in Eastern and Western Canada in July, which allowed plants to refine oil and gas products at a faster clip.

Some economic hope

The national GDP performance could be a sliver of economic sunlight in an otherwise dark fiscal sky across North America.

Plunging equity markets and plummeting oil prices had investors abandoning equity issues in both Canada and the United States on Monday.

The failure of Congress to pass a $700-billion US rescue plan for Wall Street caused the Dow Jones industrial average to tank, losing 777 points. Toronto's TSX slumped even further, off 840 points at the end of the trading day.

Goods gain

Perhaps surprisingly, the country's ailing manufacturing sector, an economic drag for most of the year, posted a decent production gain, 1.3 per cent in July. In this broad category, higher sales of steel products and medical goods, including drugs, were the important factors in the sector's surge.

On a July-over-July basis, however, manufacturing still lost ground, down 2.9 per cent.

GDP in the retail sector, a sign of consumer willingness to spend, was flat for the month at 0.0. Comparing the month with July 2007, however, retail GDP was up four per cent.

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