Statistics Canada reported that the Canadian economy expanded for the fourth consecutive month in February, although growth appeared to be slowing as the first quarter came 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, its strongest performance in over three years. The growth was primarily led by the machinery subsector, followed by improvements in transportation equipment manufacturing. Notably, several auto assembly plants in Ontario resumed operations in February after a period of shutdown for upgrades and maintenance.
Compared to the previous year, manufacturing activity in February was down by 3.1%, impacted by ongoing tariffs and trade uncertainties with the United States. The wholesale trade and transportation and warehousing sectors also contributed positively to the economic expansion, while a slowdown in the public sector and the arts, entertainment, and recreation industry hindered overall growth.
Statistics Canada highlighted that spectator sports activities were subdued in February due to the NHL hiatus for the Olympics in Italy. These February gains aligned with early estimates and marked the continuation of a four-month growth streak. Despite a sharp economic decline in October, the final quarter of 2025 ended with a slight overall negative growth.
Preliminary figures for March indicated that real GDP remained relatively stable during the month, setting the stage for a projected 1.7% annualized growth rate for the first quarter. While wholesale trade and transportation and warehousing sectors expanded further in March, declines in retail trade and mining, quarrying, and oil and gas extraction offset some of the gains. Seasonal maintenance in the energy sector and disruptions like the refinery explosion in Texas likely impacted oil production during that period.
The Bank of Canada’s monetary policy report, released alongside its decision to maintain the key interest rate at 2.25% in April, forecasted a 1.5% annualized growth for the first quarter. Updated GDP figures for March and the first quarter as a whole will be released by Statistics Canada at the end of May.