| Consensus | Consensus Range | Actual | Previous | |
| Month over Month | 0.0% | 0.0% to 0.0% | 0.1% | 0.2% |
| Year over Year | 0.6% | 1.0% |
Highlights
Canada's GDP growth slowed down to 0.1 percent in January from 0.2 percent in December, a slightly better showing than the flat performance expected by forecasters in an Econoday survey.
The advance estimate for February points to a 0.2 percent increase.
The January increase was led by a 0.2 percent expansion in goods-producing industries, the same pace as in December. Meanwhile, services were flat after rising 0.3 percent the previous month.
The impact of the Iran war, which started with U.S. and Israel's airstrikes on February 28, is not reflected in today's data. For now, Bank of Canada Senior Deputy Governor Carolyn Rogers maintains that It's too early to assess the impacts of the war on growth in Canada. As for inflation, the central bank expects it to head higher in the near term due to energy prices. What we need to guard against is that higher energy process start to spread to other goods and services and become ongoing, persistent inflation, Rogers warned in a speech last week.
Looking ahead, the Canada-United States-Mexico Agreement (CUSMA) trilateral trade deal is up for review in 2026 and also represents an important source of risk for the Canadian economy that is also closely watched by the Bank of Canada. Beyond industries directly affected by U.S. tariffs, the central bank is monitoring the spillover into the broader economy, notably through weaker production and employment.
In January, mining, quarrying, and oil and gas extraction recovered 1.2 percent after contracting 1.0 in December, with preliminary data pointing to an increase in mining, quarrying and support services in February. Construction rose 1.1 percent in January in a third consecutive increase. A 0.6 percent advance in utilities also pushed goods output higher in January. These gains outpaced a 1.4 percent drop in manufacturing that undid a 1.3 percent increase the previous month. Preliminary estimates point to a manufacturing recovery in February.
In services, the picture was more mixed. Wholesale trade was down 1.2 percent after rising 1.5 percent in December. Transportation contracted 0.7 percent after two consecutive monthly increases, against the backdrop of extreme weather conditions in late January. Real estate, and rental and leasing contracted 0.2 percent, the first decline since March 2025, consistent with falling existing home sales across the country. On the upside, retail trade rose 0.8 percent. Elsewhere, finance and insurance expanded 0.5 percent, the largest increase since September 2025, with preliminary data pointing to further gains in February.
Market Consensus Before Announcement
Forecasters agree with StatsCan’s advance estimate that looks for GDP flat in January after 0.2 percent growth in December. That reflects manufacturing plant outages offset by gains in energy sector output.
Definition
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.
Description
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.