* Economy grows 0.3 pct in August vs forecast of 0.2 pct
* Oil and gas extraction expands 2.8 pct
* Non-farm payroll employment rises by 51,300 in August
OTTAWA, Oct 31 (Reuters) - Canada's thriving oil and gas industry helped the economy grow by 0.3 percent in August from July, Statistics Canada said on Thursday, confirming modest growth that is seen keeping the Bank of Canada on hold for over a year.
The main contributor to growth in August was mining and oil and gas extraction, with accommodation and food industries, real estate services and agriculture and forestry also providing support. Manufacturing shrank and construction was flat.
Analysts in a Reuters poll had forecast, on average, a 0.2 percent gain in gross domestic product in the month. Monthly GDP grew by a stronger-than-expected 0.6 percent in July.
Goods-producing industries grew 0.4 percent, led by a 2.8 percent jump in oil and gas extraction and a similar increase in support activities for that sector.
Services industries expanded by 0.3 percent on growth across almost all sectors. Wholesale trade and transportation and warehousing grew 0.4 percent, while real estate services and professional, scientific and technical services both gained 0.3 percent. Accommodation and food services increased 1.3 percent.
Year over year in August, the economy grew 2 percent.
In a separate release, Statscan said non-farm payroll employment increased by 51,300 in August, rising across all major industrial sectors. The payrolls data is not the most closely-watched employment indicator and lags the market-moving labour force survey by several weeks.