ottawacanadian economic output maintained modest growth in august thanks in part to a rebound in retail trade and early indications point to only slight growth in the third quarter as construction activity continues to contract the bank of canada has cautioned it expects economic growth to stall in the later part of the year but has said interest rates likely will rise further to help cool inflation gross domestic product a broad measure of goods and services produced across the economy edged up 01 monthovermonth in august to 206 trillion canadian dollars the equivalent of us152 trillion statistics canada said friday that followed a similar 01 increase onmonth in july market expectations were for unchanged gdp for august according to economists at td securities the data agency said that early indications are that gdp in september increased 01 with increases in the oil and gas manufacturing and public sectors partially offset by declines in construction based on advance information statistics canada forecast gdp increased an annualized 04 in the third quarter much slower than the pace seen in the first two quarters a string of interestrate increases this year in the face of high inflation has begun to weigh on some corners of canadas economy most noticeably on housing which has been an engine of growth the bank of canada has forecast economic growth will stall through the end of this year and the first half of next year in its latest monetarypolicy report this week the central bank scaled back its gdp projections forecasting growth of just under 1 in 2023 from an expected about 33 this year statistics canadas gdp report showed that the retail sector rose 12 in august from the month before a rebound from july when output fell back to december 2021 levels sales at gasoline stations increased strongly after three consecutive monthly declines as gasoline prices fell while food and beverage stores and sporting goods hobby book and music stores also logging growth wholesale trade was up for the second time in seven months and growth in the public sectorwhich includes educational services health care and social assistance and public administrationcontinued in august statistics canada said the construction sector contracted for a fifth consecutive month driven by weakness in engineering and other construction activities the data agency said residential building construction was down for the fourth time in five months contracting 07 in august although the level of activity in august was more than 8 above the february 2020 precovid19pandemic level the manufacturing sector august declined for the fourth time in five months and showed the lowest output level since january 2022 the mining quarrying and oil and gas extraction sector contracted 10 in august following a strong gain the previous month on wednesday the central bank lifted its key interest rate a sixth time this year boosting it a halfpercentage point to 375 the move marked less aggressive tightening than most economists had anticipated though the bank said it expected interest rates would need to rise further given elevated inflation and inflation expectations as well as ongoing demand pressures in the economy still the bank of canada said the effects of recent rate increases were becoming evident in interestrate sensitive areas of the economy with spending by households and businesses cooling and housing activity retreating last week statistics canada said the consumer price index rose 69 in september from a year earlier a slight decline from 7 annual inflation seen the month before even as segments such as grocery prices continue to rise sharply data covering thirdquarter gdp is scheduled for release on nov 29 gdp rose 33 at an annual rate in the second quarter picking up slightly from a 31 advance in the first three months of the year