Statistics Canada reported that the Canadian economy continued its growth trend in February, marking the fourth consecutive month of expansion. However, there were indications that the pace of growth was slowing towards the end of the first quarter.
According to the agency, real gross domestic product (GDP) increased by 0.2% in February, with the manufacturing sector leading the way with a notable 1.8% growth, the highest in over three years. The growth was primarily driven by the machinery subsector, followed by gains 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.
Despite the positive monthly growth, on an annual basis, manufacturing activity in February was down by 3.1%, reflecting the impact of tariffs and trade uncertainties with the United States over the past year.
Other sectors that contributed to economic growth in February included wholesale trade and transportation and warehousing. Conversely, a decline in the public sector and a slowdown in arts, entertainment, and recreation industries had a dampening effect on overall growth.
Statistics Canada highlighted that spectator sports activity was subdued in February due to the NHL pausing for two weeks during the Olympics Games in Italy. The February growth aligns with the agency’s early estimates and marks the fourth consecutive month of economic expansion following a sharp contraction in October, which slightly dragged down the final quarter of 2025.
Looking ahead, early estimates for March suggest that real GDP remained relatively stable, setting the first quarter up for an annualized growth rate of 1.7%. While wholesale trade and transportation sectors saw further gains in March, declines in retail trade, mining, and oil and gas extraction tempered overall growth. Factors such as seasonal maintenance in the energy sector and a refinery explosion in Texas likely contributed to the slowdown.
The Bank of Canada’s recent 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.