Statistics Canada reported that the Canadian economy expanded in February for the fourth consecutive month, although there were signs of a slowdown by the end of the first quarter. Real gross domestic product (GDP) increased by 0.2% in February, driven by a robust 1.8% growth in the manufacturing sector, marking its highest growth rate in over three years.
The growth in manufacturing was primarily led by the machinery subsector, with transportation equipment manufacturing also contributing to the positive performance. Notably, several auto assembly plants in Ontario resumed operations in February after a period of retooling and maintenance.
Compared to the previous year, manufacturing activity in February was down by 3.1%, impacted by tariffs and trade uncertainties with the United States. Wholesale trade and transportation and warehousing sectors also played a role in boosting the economy during the month, while a decline in the public sector and a slowdown in arts and entertainment industries had a dampening effect.
Statistics Canada highlighted that spectator sports activities were subdued in February due to the NHL pausing for two weeks for the Olympics Games in Italy. The February growth aligned with early estimates and marked the fourth consecutive month of economic expansion. However, an economic contraction in October resulted in a slightly negative performance for the final quarter of 2025.
Preliminary estimates for March indicated that real GDP remained relatively stable, potentially setting the first quarter growth rate at 1.7% on an annualized basis. While wholesale trade and transportation sectors saw gains in March, retail trade, mining, quarrying, and oil and gas extraction experienced declines. Seasonal maintenance in the energy sector and an incident at a refinery in Texas were cited as factors that may have slowed oil production.
The Bank of Canada’s monetary policy report projected a 1.5% annualized growth rate for the first quarter. Updated figures for March GDP and the overall first quarter performance will be released by Statistics Canada at the end of May.
