Statistics Canada reported that the Canadian economy expanded for the fourth consecutive month in February, although growth momentum appeared to slow towards the end of the first quarter. Real gross domestic product (GDP) increased by 0.2% in February, with the manufacturing sector leading the way with a robust 1.8% growth rate, marking its fastest pace in over three years.
The growth in the machinery subsector and transportation equipment manufacturing contributed significantly to the overall increase. Notably, several auto assembly plants in Ontario resumed operations in February after a temporary shutdown for retooling and maintenance in the previous month.
Despite the positive trend, manufacturing activity was 3.1% lower in February compared to the same period last year, mainly due to ongoing trade tensions with the United States. Other sectors that drove economic growth in February included wholesale trade and transportation and warehousing, while a contraction in the public sector and a slowdown in the arts, entertainment, and recreation industry had a dampening effect.
Statistics Canada highlighted that spectator sports activity was subdued in February as the NHL took a break for two weeks during the Olympics Games in Italy. The agency’s preliminary estimates for March indicated that real GDP remained relatively stable during the month, potentially resulting in a 1.7% annualized growth rate for the first quarter.
The Bank of Canada, in its recent monetary policy report, projected a 1.5% annualized growth rate for the first quarter. Updated GDP figures for March and the full first-quarter performance will be released by Statistics Canada at the end of May.
