Statistics Canada reported that the Canadian economy expanded for the fourth consecutive month in February, although there were indications of a slowdown approaching the end of the first quarter. Real gross domestic product (GDP) increased by 0.2% in February, driven by a robust 1.8% growth in the manufacturing sector, marking its strongest growth rate in over three years.
The growth in manufacturing was primarily fueled by the machinery subsector and gains in transportation equipment manufacturing. Notably, several auto assembly plants in Ontario resumed operations in February following a period of retooling and maintenance in the previous month.
However, on a yearly basis, manufacturing activity in February was down by 3.1%, largely impacted by tariffs and trade uncertainties with the United States. Additionally, the wholesale trade and transportation sectors contributed positively to economic growth in February, while a decline in the public sector and a slowdown in the arts, entertainment, and recreation industry had a dampening effect.
Statistics Canada highlighted that spectator sports activities were subdued in February due to the NHL hiatus for the Olympics Games in Italy. The agency’s preliminary estimates for March suggest that real GDP remained relatively stable during the month, potentially resulting in a 1.7% annualized growth rate for the first quarter.
March saw continued growth in the wholesale trade and transportation sectors, offset by declines in retail trade, mining, quarrying, and oil and gas extraction. Factors such as seasonal maintenance in the energy sector and a refinery explosion in Texas likely hampered oil production during that period.
The Bank of Canada’s recent monetary policy report projected a 1.5% annualized growth 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.