RBC Sees Canada July GDP Up 0.2% on Exports, Manufacturing Gains

06:21 AM EDT, 09/22/2025 (MT Newswires) -- Canada's July gross domestic product data due Friday will be in focus as early readings suggest the Q2 contraction was not repeated in Q3, RBC said.

The bank expects GDP to rise 0.2% from June, topping Statistics Canada's preliminary 0.1% estimate and marking a rebound after three straight monthly declines.

Canadian export and manufacturing sales volumes increased 0.7% and 1.6%, respectively, in July after sharp Q2 drops. Early data point to another rise in Alberta oil production as activity recovers from May wildfire disruptions, RBC said.

Wholesale volumes climbed for a third month, up 0.8% from June and 3% year over year, while home resales gained almost 4%. Retail sales softened, partly retracing June's jump, but Statistics Canada's August advance estimate signaled a 1% rebound. Service-sector output also appears to have accelerated slightly.

Employment fell 41,000 in July, but hours worked slipped just 0.2% and remain above Q2 averages through August, aligning with RBC's forecast for modest Q3 growth.

RBC added that the Bank of Canada will likely need to cut interest rates further after its first reduction since March, but future moves depend on early October trade and labor data and the upcoming Business Outlook Survey. The bank's early Q3 GDP tracking is broadly in line with the BoC's view.

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