Statistics Canada reported that the Canadian economy expanded for the fourth consecutive month in February, although growth seemed to slow as the first quarter drew to a close. Real gross domestic product (GDP) increased by 0.2% in February, driven by a robust 1.8% growth in the manufacturing sector, marking its strongest growth rate in over three years.
The machinery subsector led the growth, closely followed by advancements in transportation equipment manufacturing. Notably, several auto assembly plants in Ontario resumed operations in February after a period of shutdown for retooling and maintenance in the previous month.
Compared to the previous year, manufacturing activity in February was down by 3.1%, influenced by ongoing tariffs and trade tensions with the United States. The wholesale trade and transportation and warehousing sectors also made positive contributions to the economy in February, while a decline in the public sector and a slowdown in the arts, entertainment, and recreation industry had a dampening effect on overall growth.
According to Statistics Canada, spectator sports activity was subdued in February due to the NHL pausing for two weeks during the Winter Olympics in Italy. The February economic performance aligns with early estimates and marks the fourth consecutive month of growth following a significant economic downturn in October that slightly dragged down the final quarter of 2025.
Preliminary estimates for March suggest that real GDP remained relatively stable during the month, setting the stage for a first-quarter annualized growth rate of 1.7%. While the wholesale trade and transportation and warehousing sectors saw gains in March, retail trade, mining, quarrying, and oil and gas extraction experienced declines. Factors such as seasonal maintenance in the energy sector and a refinery explosion in Texas likely contributed to the slowdown in oil production.
The Bank of Canada’s monetary policy report projected a 1.5% annualized growth rate for the first quarter, with uncertainties surrounding future decisions. Updated GDP figures for March and the first quarter from Statistics Canada are expected to be released at the end of May.