Canada's economy grew a moderate 0.1 per cent in August, Statistics Canada reported Friday, suggesting the bounce-back from recession that happened this summer is losing steam.
"After the strong rebound in June/July, it’s back to reality for the Canadian economy now," CIBC economist Andrew Grantham wrote in a client note. "And that reality appears to be very modest growth."
Despite oil prices being down 60 per cent from their peak last year, Canada's oil sector continued to grow, and output is up 0.5 per cent from a year earlier.
But this only "captures the physical volume of output and says nothing about the deep drop in the value of [oil] and the deep drop in related activities," Bank of Montreal chief economist Doug Porter wrote.
Construction was flat for the month, but is down 3.5 per cent from a year ago. Manufacturing was up 0.4 per cent on the month, but that's after a long sluggish period, and the sector is up only 0.6 per cent in a year.
All told, Canada's economy was 0.9 per cent larger in August than it was a year earlier.
Among the strongest parts of the economy were finance & insurance (up 5.5 per cent over the past year), real estate (up 3.1 per cent) and retail trade (up 2.0 per cent).
"After a brief burst of growth around mid-year, which followed the first-half sag, the Canadian economy is settling back into slow-growth slog," Porter concluded.