The Canadian economy advanced 0.2% in July following a 0.3% increase in June, Statistics Canada said today.

Growth in July was concentrated in mining, oil and gas extraction and exploration, retail trade, and transportation industries, the government agency said.

The oil and gas industry was spurred by a further increase in already high oil prices. However, economic activity was hampered by declines in manufacturing, wholesale trade and utilities.

Industrial production — the output of mines, utilities and factories– increased 0.3% in July. Declines in manufacturing, down 0.3%, and utilities, down 2.5%, were more than offset by a 3.6% surge in the mining, oil and gas extraction sector, where high crude oil prices coupled with the end of a labour dispute helped push the growth.

Oil and gas exploration bounced back 20% from a 14% drop in June caused by unfavourable weather conditions. Light crude oil prices rose a further 3.2% in July, after increasing 12% in June.

Oil and gas extraction advanced 1.0% despite a drop in the tar sands area attributable to maintenance work.

Mining excluding oil and gas extraction gained 3.7% on the strength of iron ore production.

With the special incentive programs by auto makers extended through the summer, new motor vehicle dealers enjoyed a second consecutive month of brisk sales.

The retail trade sector gained 1.2% largely on that strength, as retailing activities excluding motor vehicles edged up 0.4% with the largest gain recorded by supermarkets.

Wholesale trade activity declined 1.4% in July, dragged down by reduced sales of computers and other electronic equipment, lumber and millwork, personal and household products and oil products. The largest gain was recorded by wholesalers of motor vehicles.

Construction activity eased back 0.1% in July.

Manufacturing output declined 0.3% in July, with 14 of the 21 major groups, accounting for 60% of this sector’s output, recording decreases.

Transportation and warehousing gained 0.4%.