Canada's economy stalls in July as construction gains offset factory and retail declines; August flash points to +0.2%

Statistics Canada reported on 29 September 2026 that real gross domestic product was essentially unchanged in July, a monthly change of 0.0%. Ten of the 20 industrial sectors expanded. Its advance estimate for August is an increase of 0.2%.

What moved in July

• Construction: +1.3%, the fourth consecutive monthly rise, with all subsectors expanding. Non-residential building construction rose 2.9%, its largest increase since January 2022, helped by a new hospital in Ontario
• Utilities: +1.7%, as a July heat wave lifted electricity demand
• Manufacturing: −0.9%, the first fall in four months. Petroleum and coal products fell 5.7% after unplanned downtime at a refinery in southwestern Ontario, and machinery fell 5.1%
• Mining, quarrying, and oil and gas extraction: −0.5%, with potash mining down 6.4%
• Retail trade: −1.0%, with gasoline stations and fuel vendors down 3.5%, which Statistics Canada links to rapidly rising gasoline prices in the peak travel season
• Wholesale trade: −0.4%
• Professional, scientific and technical services: +0.3%, the largest monthly gain since November 2024
• Accommodation and food services: +0.8%

Goods-producing industries were essentially unchanged overall because construction and utilities offset declines elsewhere. Services-producing industries were flat, with gains in several sectors offset by retail and wholesale.

The August flash and the date to watch

The advance estimate of +0.2% for August reflects increases in mining and quarrying and in retail trade, partly offset by lower oil and gas extraction. Statistics Canada will update it with the official August figure on 30 October. The second quarter had already been reported (report), and July retail sales fell 0.7% (report).

What it means for the Canadian dollar

A flat month before the Bank of Canada's 28 October decision keeps the argument over the 2.25% policy rate open: it held in September (report) while consumer price inflation sat near 3% (report). The September jobs report arrives on 9 October. Oil prices and the Canadian dollar covers the commodity link. Live prices: USD/CAD.