Statistics Canada reported that the Canadian economy continued its growth trend in February, marking the fourth consecutive month of expansion. Despite this positive trend, there were indications that the momentum was slowing down as the first quarter progressed.
In February, the real gross domestic product (GDP) increased by 0.2%, driven by a significant 1.8% growth in the manufacturing sector, the highest rate of growth seen in over three years. The growth was primarily led by the machinery subsector and transportation equipment manufacturing. Notably, several auto assembly plants in Ontario resumed operations in February after a period of shutdown for retooling and maintenance.
Compared to the previous year, manufacturing activity in February was down by 3.1%, attributed to ongoing trade tensions and tariffs imposed by the United States. Other sectors that contributed to economic growth in February included wholesale trade and transportation and warehousing, while the public sector and arts, entertainment, and recreation industry experienced contractions.
Statistics Canada highlighted that spectator sports activity was subdued in February due to the NHL pause for two weeks during the Olympics Games in Italy. The February GDP growth aligned with early estimates and marked the fourth consecutive month of economic expansion, following a decline in the final quarter of 2025.
Preliminary estimates for March indicated that the real GDP remained relatively stable, potentially resulting in a 1.7% annualized growth rate for the first quarter. While wholesale trade and transportation and warehousing sectors showed gains in March, declines were observed 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 impacted oil flows during that month.
The Bank of Canada’s monetary policy report projected a 1.5% annualized growth rate for the first quarter, emphasizing uncertainties in future decisions. Updated GDP figures for March and the first quarter are scheduled for release by Statistics Canada at the end of May.