Statistics Canada reported that the Canadian economy experienced its fourth consecutive month of growth in February, although signs of a slowdown emerged towards the end of the first quarter. Real gross domestic product (GDP) increased by 0.2% in February, driven by a robust 1.8% expansion in the manufacturing sector, marking its most rapid growth in over three years.
The growth was primarily led by the machinery subsector, with transportation equipment manufacturing also contributing to the positive trend. Notably, multiple auto assembly plants in Ontario resumed operations in February after a period of shutdown for retooling and maintenance.
However, on a yearly basis, manufacturing activity in February was down by 3.1%, impacted by ongoing tariffs and trade uncertainties with the United States. Despite this, the wholesale trade and transportation and warehousing sectors played a significant role in boosting the economy during the month. Conversely, a decline in the public sector and a slowdown in the arts, entertainment, and recreation industry exerted downward pressure on overall growth.
Statistics Canada highlighted that spectator sports activity was subdued in February due to the NHL hiatus for the Olympics in Italy. The agency’s initial estimates for March indicate that the real GDP remained relatively stable, potentially resulting in a 1.7% annualized growth rate for the first quarter.
In March, gains in wholesale trade and transportation and warehousing were offset by declines in retail trade, mining, quarrying, and oil and gas extraction. The energy sector’s seasonal maintenance and a refinery explosion in Texas likely impeded oil production during the month.
The Bank of Canada, in its recent monetary policy report, projected a 1.5% annualized growth for the first quarter. Updated GDP figures for March and the first quarter as a whole are scheduled for release by Statistics Canada at the end of May.