Statistics Canada says the Canadian economy shrank in the month of February, but declines might not last long, as early signs for March point to moderate GDP growth.
The agency says real gross domestic product decreased 0.2 per cent in February. This follows previous growth in the month of January of 0.4 per cent overall.
While goods-producing industries pulled the economy up in January, Statistics Canada says it saw a decline of 0.6 per cent overall for February. The mining, quarrying, and oil and gas extraction sector in particular saw the steepest decline, of 2.5 per cent.
Service-producing industries also dipped by 0.1 per cent overall, Statistics Canada says. Construction contracted for the first time in four months to 0.5 per cent, while the real estate, rentals and leasing sector dropped 0.4 per cent as well.
Statistics Canada says 12 of the country’s 20 industrial sectors saw declines in February.
But the manufacturing sector bucked the trend — that industry saw a 0.6 per cent rise in February. The finance and insurance sector rose for a third consecutive month, too, according to the agency, by 0.7 per cent, which helped offset some of the overall decrease.
Advanced information from Statistics Canada indicates that real GDP increased by 0.1 per cent last month. The agency says the annualized growth rate for the first quarter of 2025 based on the March flash estimate is 1.5 per cent.
The agency added that winter storms that hit central and Eastern Canada as well as British Columbia contributed to slowdowns, especially in the transportation and warehouse sector, which saw a 1.1 per cent drop.
Douglas Porter, chief economist at BMO Financial Group, said bad weather — not tariff uncertainty — can be blamed for much of the February dip.
“The rebound in March reinforces the point that much of February’s drop was weather-related and not really a sign that the economy was buckling due to trade uncertainty,” he said.
He said attention will now turn to the year’s second quarter, when fallout from the trade war with the U.S. will come into clearer view. Any growth in the second quarter would come as a surprise to him, Porter said.
