Statistics Canada reported that the Canadian economy expanded for the fourth consecutive month in February, indicating a slight slowdown in momentum by the end of the first quarter. Real gross domestic product (GDP) increased by 0.2% in February, propelled by a robust 1.8% growth in the manufacturing sector, the sharpest surge in over three years.
The machinery subsector led the growth, accompanied by advancements in transportation equipment manufacturing. Notably, various auto assembly plants in Ontario resumed operations in February following a temporary shutdown for maintenance and retooling in the preceding month.
Year-over-year, manufacturing activity in February was down by 3.1%, impacted by ongoing trade tensions and tariffs imposed by the United States. The wholesale trade and transportation sectors contributed positively to economic expansion in February, while a contraction in the public sector and a slowdown in the arts, entertainment, and recreation industry hindered growth.
Statistics Canada highlighted a decline in spectator sports activity in February due to the NHL hiatus during the Winter Olympics in Italy. The February economic performance aligned with earlier projections and marked the fourth consecutive month of growth following a notable contraction in October.
Preliminary estimates for March suggest stagnant real GDP for the month, potentially resulting in a first-quarter annualized growth rate of 1.7%. While gains in wholesale trade and transportation sectors were observed in March, declines in retail trade and mining, quarrying, and oil and gas extraction sectors were noted. The energy sector faced seasonal maintenance, and an incident at a major refinery in Texas impeded oil production during that period.
The Bank of Canada’s monetary policy report, released alongside its recent rate decision, forecasted a 1.5% annualized growth rate for the first quarter. Updated GDP figures for March and the first quarter from Statistics Canada are scheduled for release at the end of May.