| Consensus | Consensus Range | Actual | Previous | |
| Month over Month | 0.2% | 0.2% to 0.3% | 0.2% | 0.1% |
| Year over Year | 1.0% | 0.6% |
Highlights
Canada's GDP growth picked up in February, to 0.2 percent from 0.1 percent in January, in line with expectations in an Econoday survey of forecasters, and confirming Statistics Canada's preliminary estimate.
The expansion was driven by another 0.4 percent gain in goods-producing industries, while services edged up 0.1 percent after a flat January performance.
The advance estimate for March, the first month impacted by the Middle East conflict started February 28, points to stalling output. Increases in wholesale trade and transportation and warehousing were offset by decreases in retail trade and mining, quarrying, and oil and gas extraction.
A flat output in March would translate into a 0.4 percent GDP growth in the first quarter (roughly 1.6 percent annualized), in line with the Bank of Canada's projection of an annualized GDP growth of 1.5 percent in the first quarter, driven by domestic demand, while exports and inventories drag growth performance. The central bank's latest projections published Wednesday show little change to the 2026 and 2027 GDP estimates despite heightened uncertainty related to the Middle East war. The conflict in the Middle East will affect the composition of growth, but the impact on overall growth is expected to be small because higher global oil prices increase the value of our energy exports even as they squeeze consumers and many businesses, Governor Tiff Macklem said. To that effect, it will be interesting to see how the energy sector sector responded in the March GDP report.
Despite the strong showing in goods-producing industries, details show gains were concentrated in two sectors, led by a 1.8 percent rebound in manufacturing, more than recovering the 1.3 percent decline in January. The increase owed to a 3.6 percent rebound in durable manufacturing, while nondurables edged down 0.1 percent in a fifth consecutive decline. Mining, quarrying, and oil and gas extraction was up 0.4 percent, a slowdown from 1.4 percent the previous month. Energy edged up 0.1 percent and industrial production expanded 0.9 percent.
By contrast, construction contracted 0.5 percent and agriculture, forestry, fishing and hunting was down another 1.3 percent, the fourth consecutive monthly decrease.
In services, transportation and warehousing recovered 1.2 percent after declining 0.6 percent in January. Also driving services up, wholesale trade increased 0.9 percent after falling 1.4 percent in January.
On the downside, public administration contracted 0.5 percent, with the public sector as a whole down 0.3 percent.
Market Consensus Before Announcement
Forecasters agree, as usual, with the Stats Canada preliminary estimate calling for a gain of 0.2 percent on the month in February.
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.