Statistics Canada reported that the Canadian economy expanded for the fourth consecutive month in February, although there were indications of a slowdown towards the end of the first quarter. Real gross domestic product (GDP) increased by 0.2% in February, with the manufacturing sector leading the growth at a rate of 1.8%, the fastest in over three years. Growth was primarily driven by the machinery subsector, followed by gains in transportation equipment manufacturing. Several auto assembly plants in Ontario resumed operations in February after a period of shutdown for retooling and maintenance.
Despite the positive monthly growth, manufacturing activity was 3.1% lower in February compared to the previous year due to ongoing tariffs and trade uncertainties with the United States. The wholesale trade and transportation sectors contributed to the economic expansion, while the public sector and arts, entertainment, and recreation industry experienced contractions.
Statistics Canada highlighted a decrease in spectator sports activity in February, attributed to the NHL pausing games for two weeks during the Winter Olympics in Italy. The February growth aligned with early estimates and marked the fourth consecutive month of economic expansion. Preliminary data for March indicated minimal GDP change, projecting a first-quarter annualized growth rate of 1.7%.
In March, gains in wholesale trade and transportation were offset by declines in retail trade and mining, quarrying, and oil and gas extraction. Factors such as seasonal maintenance in the energy sector and an explosion at a refinery in Texas likely impacted oil production. The Bank of Canada’s monetary policy report anticipated a 1.5% annualized growth rate for the first quarter.
Updated GDP figures for March and the first quarter will be released by Statistics Canada in late May.