OTTAWA – Canada’s economy was probably revived in August from a slight contraction in July, boosted by growth in the hospitality industry, although a drought will continue to drag on important agricultural sectors, data showed Friday.
Statistics Canada said the Canadian economy contracted 0.1 percent in July, beating analysts’ estimates of a 0.2 percent decline, but likely a 0.7 percent increase in August in terms of jumps in services and manufacturing. The August number is a preliminary estimate.
With growth expected in August, total economic activity is about 1 percent below pre-epidemic levels, Statscan said.
Doug Porter, chief economist at BMO Capital Markets, said: “A slightly smaller push than expected in July and nice pop in August indicate that the economy as a whole has been able to achieve some moderate growth in the summer quarter.” .
The fall of July came when a heatwave hit the agricultural sector and pulled suppliers due to supply chains, while construction declined for the third month in a row.
This was partly offset by strong momentum in the figures, as simplification of the public health system has continued to revitalize hospitality and tourism, Statscan said.
That power in the service is expected to expand in August and beyond, even in the Prairie provinces of Alberta and Saskatchewan, where the fourth wave of Covid-1 infections is spreading.
Analysts said the Bank of Canada is likely to go a little further in its October 27 rate decision, although August gains are probably not enough for the central bank to move the interest rate dial-especially after the disappointing second-quarter contraction.
Stephen Brown, a senior Canadian economist at Capital Economics, said: “We think (the Bank of Canada) is unlikely to take a hawkish turn to other global central banks any time soon.”
The Canadian dollar was almost unchanged at 1.2675 per greenback, or 78.90 US cents.
By Julie Gordon
This News Originally From – The Epoch Times