The Canadian economy was flat in March, in line with the consensus forecast of no change expected in an Econoday survey. February was unrevised from the 0.2 percent increase initially reported.

The advance estimate for April points to a gain of 0.3 percent.

Today's report leaves interest rate cuts on the table as growth fizzled in the latter part of the first quarter. Forecasters appear evenly split between no change and a rate cut but the market tends to favor a 25 basis point rate cut next week from the Bank of Canada.

In March, 11 of 20 sectors increased on the month. Construction led the way with a gain of 1.1 percent, with its largest growth rate since January 2022. The public sector continued to expand with a 0.2 percent rise in March as the sector recovered from declines in November and December due largely to Quebec public worker strikes.

On the downside, manufacturing was the biggest downer with a decline of 0.8 percent for its second decline in a row. Transportation equipment manufacturing was the biggest negative for manufacturing, down 2.4 percent. Wholesale trade fell 0.9 percent in March. Mining, quarrying and oil & gas extraction decreased 0.5 percent.

After rising a monthly 0.2 percent in February, no change is expected for March.

Gross domestic product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. In contrast to most industrialised countries a monthly estimate is provided derived from the value added by labour and capital in transforming inputs purchased from other producers into that industry's output. Data for the reference month are usually released close to the end of the second month after the reference period.

Instead of producing an advanced quarterly GDP figure and revising it the following two months, Statistics Canada releases monthly estimates of real GDP at Basic Prices. This release breaks down real output by seven goods-producing industries and twelve service-producing industries, and includes special aggregations such as business sector, non-business sector, and industrial production.

The sources of data used for monthly and quarterly estimates often differ and leads to very different estimates for certain items, such as price deflators. As a result, the monthly figures are not perfectly correlated with the quarterly numbers. However, the monthly data do give some idea of where the quarter is headed and especially in an uncertain environment, they are closely watched. While industrial production is closely watched in the U.S., it is not in Canada especially since the economy has become increasingly dominated by services. However, the goods sector is more vulnerable to wide swings in output compared to services, and exports remain dominated by industrial output.