Economic activity in Canada saw a 0.4 percent jump in January, building on December's revised 0.3 percent rise (previously reported as a 0.2 percent increase). This is above expectations for a 0.3 percent growth rate in the Econoday survey of forecasters, fueled by a flood of goods orders as businesses stockpiled ahead of tariffs imposed by the United States. Compared to January 2024, GDP rose 2.2 percent.

Activity in the goods-producing industries jumped 1.1 percent following a 0.4 percent rise in December, the largest increase since October 2021. All the industrial sectors expanded, with mining, quarrying, oil and gas extraction, as well as manufacturing the main drivers of growth.

Services-producing industries saw just a 0.1 percent rise in activity in January (slowing down from the 0.3 percent increase in December). Retail trade was the major drag on services activity, declining by 0.9 percent following a 2.6 percent growth rate in December.

Forecasters agree with the Stats Canada estimate seeing GDP up 0.3 percent on the month in January. Growth was picking up at the start of the year before tariffs descended.

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.