By Julie Gordon
OTTAWA (Reuters) -Canada’s economy sputtered slightly in July on decreases in agriculture, manufacturing and construction, but is likely to have rebounded sharply in August, edging overall economic activity closer to pre-pandemic levels, data showed on Friday.
The Canadian economy contracted 0.1% in July, just beating analyst estimates of a decline of 0.2%, but likely grew by 0.7% in August on jumps in services and manufacturing, Statistics Canada said. The August number is a preliminary estimate.
With the expected rise in August, total economic activity is about 1% below pre-pandemic levels.
The July decline came as a heat wave hit the agriculture sector and construction activity declined, while manufacturers were dragged down by supply chain woes. This was partially offset by strong momentum in the services, Statscan said.
“While restaurants and bars were rocking again … other parts of the economy were sagging,” said Royce Mendes, senior economist at CIBC Capital Markets, in a note.
The Canadian dollar weakened 0.1% to 1.2687 per greenback, or 78.82 U.S. cents.
(Reporting by Julie Gordon in Ottawa, Editing by Timothy Heritage and Giles Elgood)
