Canada’s real gross domestic product growth unexpectedly remained flat in August, another sign that economic growth slowed in the third quarter of 2026 after a second-quarter rebound.

According to data from Statistics Canada published on Friday, retail trade bounced back in August and grew by 1.2 per cent month over month, driven by a rebound in motor vehicle and parts dealers. The manufacturing sector also grew by 0.3 per cent, along with rail transportation at 3.6 per cent and the finance and insurance sector at 0.2 per cent.

However, wholesale trade dragged on growth, declining by 1.4 per cent. The contraction hit most subsectors but was mainly driven by a fall in motor vehicle and parts sales from lower imports of passenger cars and light trucks.

The public sector aggregate also weighed on growth, declining 0.2 per cent month over month, along with the utilities sector, which contracted by 0.4 per cent in August because some nuclear power plants in Ontario and New Brunswick underwent maintenance outages.

Month-over-month growth in mining, quarrying and oil and gas extraction was flat in August.

August’s real GDP data came after the economy experienced flat growth month over month in July and grew by 0.4 per cent in June.

Economists had predicted 0.2 per cent growth in August.

Flash estimates from Statistics Canada suggest the economy shrank by 0.1 per cent in September, but that number may be revised.

Based on the numbers so far, the economy was on track for an annualized growth rate of 1.3 per cent in the third quarter of 2026.

More to come…