Statistics Canada figures show the economy grew 0.2 per cent in July, led by the manufacturing sector.
The GDP increase is ahead of the 0.1 per cent economists expected for July, and better than June’s results, which showed no change. July’s output figures are 2.4 per cent higher than they were in the same month last year.
Twelve of 20 sectors grew in July, with manufacturing growing 1.2 per cent, the best it’s done since last November. Manufacturing figures were led by non-durable goods production at 2.4 per cent, its strongest monthly gain in four years.
Retail and construction also showed growth, while wholesale trade rebounded from June and utilities also rose thanks to unusually hot weather.
The economy’s unexpectedly strong performance, combined with continuing inflationary pressures, has sparked speculation that the Bank of Canada might raise interest rates. BoC governor Stephen Poloz said in a speech last week that interest rate increases are warranted to achieve the bank’s inflation targets.
The Bank’s next decision date is October 24.