Statistics Canada reported that the Canadian economy continued its growth trend in February for the fourth consecutive month, although there were signs of a slowdown towards the end of the first quarter. Real gross domestic product increased by 0.2% in February, driven by a robust 1.8% expansion in the manufacturing sector, marking its strongest growth rate in over three years.
The machinery subsector led the growth, with transportation equipment manufacturing also contributing positively. Notably, several auto assembly plants in Ontario resumed operations in February after a temporary shutdown for retooling and maintenance. Despite the positive monthly growth, manufacturing activity was down by 3.1% compared to the previous year due to trade tensions with the United States.
In addition to manufacturing, the wholesale trade and transportation sectors played a key role in boosting the economy in February, while a decline in the public sector and a slowdown in the arts, entertainment, and recreation industry dampened overall growth. Statistics Canada highlighted that spectator sports activity was subdued in February due to the NHL pause for the Olympics Games.
The agency indicated that the February economic performance was in line with early estimates, marking the fourth consecutive month of growth following a sharp contraction in October. Initial estimates for March suggest stable real GDP growth, setting the first quarter on track for an annualized growth rate of 1.7%.
However, March saw mixed results with gains in wholesale trade and transportation offset by declines in retail trade, mining, and oil and gas extraction. Seasonal maintenance in the energy sector and a refinery explosion in Texas impacted oil production. The Bank of Canada projected a 1.5% annualized growth rate for the first quarter in its recent monetary policy report.
Statistics Canada is set to release updated figures for March GDP and the first quarter at the end of May for a comprehensive overview of the economic performance.
