Statistics Canada reported that the Canadian economy expanded for the fourth consecutive month in February, but growth momentum appeared to be waning as the first quarter came to a close. Real gross domestic product (GDP) increased by 0.2% in February, driven by a robust 1.8% growth in the manufacturing sector, the fastest pace seen in over three years.
The machinery subsector spearheaded the growth, with transportation equipment manufacturing also contributing significantly. Notably, multiple auto assembly plants in Ontario resumed operations in February after a period of retooling and maintenance in the previous month.
Despite the positive monthly growth, on a yearly basis, manufacturing activity in February was down by 3.1%, impacted by trade tensions and tariffs imposed by the United States over the past year. Wholesale trade and transportation and warehousing sectors made notable contributions to the economic upturn in February, offsetting declines in the public sector and the arts, entertainment, and recreation industry.
Statistics Canada highlighted a dip in spectator sports activity in February, attributed to the NHL hiatus during the Winter Olympics in Italy. The agency’s preliminary estimates for March indicated stagnant real GDP, potentially resulting in a first-quarter annualized growth rate of 1.7%.
March saw mixed performances across sectors, with gains in wholesale trade and transportation and warehousing partially offset by declines in retail trade and mining, quarrying, and oil and gas extraction. Factors such as seasonal maintenance in the energy sector and a refinery explosion in Texas likely impacted oil production during the month.
The Bank of Canada’s recent monetary policy report projected a 1.5% annualized growth rate for the first quarter. Updated GDP figures for March and the first quarter are expected to be released by Statistics Canada at the end of May.