Canada’s economy expanded 0.2% in June despite manufacturing slowdown

Statistics Canada reports that Canada’s economy expanded for the fourth month in a row in June, as 17 of the 20 industries the data agency tracks expanded

GDP grew by 0.2 per cent overall, as a 0.2 per cent decline in the goods-producing sector was more than offset by a 0.3 per cent gain in the much larger service sector.

Construction, wholesale and retail trade, mining, quarrying and oil and gas, and the finance and insurance industries all grew.

Manufacturing, meanwhile, shrank by 1.4 per cent.

Impact of Raptors

For the second month in a row, Statistics Canada reported that the Toronto Raptors’ run to the NBA championship had a big enough impact to change the course of the country’s economy.

“The Raptors’ playoff run coincided with the first signs of summer-like weather across many parts of the country, with increases at food services and drinking places ( up 0.5 per cent) and sporting goods, hobby, book and music stores up 3.5 per cent,” Statistics Canada said.

The impact on the performing arts, spectator sports and heritage institutions industry, meanwhile, wasn’t as large in June as it was in May, because most of the Raptors playoff run was in May. That sector edged up 0.1 per cent in June.

Economy growing at fastest pace in 2 years

June’s numbers mean that for the three months of April to June, Canada’s economy grew at a 3.7 per cent annual pace. That’s better than what economists were expecting, and the fastest pace in more than two years.

For comparison purposes, the U.S. economy is currently growing at a two per cent annual pace, according to the latest data.

A surge in exports is the cause of much of the growth, as household spending actually inched lower.  But rexports of goods rose 3.7 per cent in the second quarter, following declines in previous two quarters. Exports of services, meanwhile, rose 1.1 per cent.