| OTTAWA, Sept 30
OTTAWA, Sept 30 Canadian economic growth got a
big boost from oil production in July, but a slowdown in
construction was in evidence as well, an early indication of the
pain that could come with the end of the country's years-long
With clear signs of cooling in Vancouver real estate, the
most expensive market, and only Toronto still booming, some
economists are braced for a hit to construction and real estate,
which they warn could trickle into other sectors as consumers
The shift would follow a two-year slump in Canada's energy
sector caused by plunging crude prices.
"It's one weakness replacing another," said Paul Ashworth,
chief North America economist at Capital Economics.
"While it's not necessarily the case that the economy will
get worse, it does mean economic growth will continue below its
potential, the unemployment rate could edge up, and we'll be
even longer without the recovery that the Bank of Canada
Gross domestic product grew 0.5 percent in July, topping
analysts' forecasts for a gain of 0.3 percent, Statistics Canada
said on Friday.
But GDP would have been essentially unchanged without the 19
percent bounce back in non-conventional oil production that
followed wildfire-related shutdowns in the spring.
By contrast, Canadian housing construction fell 1.8 percent
in July, while output by real estate agents and brokers fell 1.0
percent in the month.
The GDP data for July also does not take into account the
Vancouver slowdown that has followed the introduction of a 15
percent foreign buyer tax in the city, imposed in August.
Sherry Cooper, chief economist of Dominion Lending Centres,
said the housing decline will go beyond residential
construction, as the slowdown hits the income and spending of
the real estate sector, mortgage brokers and banks and trickles
into renovation and durable goods consumption.
To be sure, even as sales cool in Vancouver, prices continue
to rise, and Toronto remains red hot, fueling continued concern
among some that a bubble continues.
Cooper worries the slowdown could be worsened by the belated
actions of policymakers looking for more ways to slow a market
that many have labeled a bubble for years.
"What concerns me is the government seems to want to be
proactive, and that's dangerous, because if they do too much in
an environment where housing is already slowing, we could end up
with much more of a slowdown than they really want," she said.
(Reporting by Andrea Hopkins; Editing by Cynthia Osterman)