According to Stats Canada, the country’s economy saw a slight rise of 0.2% in February with early estimates stating we can expect to see a similar picture the following month.
The February figures were a tick lower than many analysts had expected, leading to some disappointment, although there was also little room for pessimism. The economy had a strong January, growing 0.5 per cent (downwardly revised from 0.6 per cent). That was largely thanks to a rebound in educational services after public sector strikes ended in Quebec.
A spokesperson for the Bank of Montreal noted similarities with early 2024 and the previous year. The key similarity being that both years started strong but soon began to wane. The loss of momentum puts additional pressure on the Bank of Canada to start cutting interest rates in June, though a move on the central bank’s part still largely depends on whether inflation continues to cool, Reitzes wrote.
The consumer price index shows inflation was at 2.9 per cent in March compared to the year before, a slight increase compared to February. Statistics Canada said gasoline prices, mortgage interest costs and rent contributed to the increased inflation rate.
StatsCan estimated that the economy expanded at an annualized rate of 2.5 per cent in the first quarter. The Canadian economy also saw gains in transportation and warehousing, while services-producing industries increased 0.2 per cent, both of which were boosted by gains in transportation and warehousing.
Transportation and warehousing grew 1.4 per cent, a pace that the data agency said was the largest monthly growth rate since January 2023. Rail transportation also contributed significantly to that sector’s growth in February, eking out a 5.5 per cent gain as it rebounded from a January cold snap.
Meanwhile, air transportation grew 4.8 per cent as demand for international travel rose, with airlines adding more flights to Asia in the lead-up to the Lunar New Year — and pipeline transportation rose 1.6 per cent, offsetting January’s decline.
Goods-producing industries were essentially unchanged as the mining, quarrying, and oil and gas extraction sectors grew and the utilities and manufacturing sectors contracted, according to StatsCan.
The public sector grew at a slower pace in February (0.2 per cent) after a 1.9 per cent increase the previous month. Overall the agency recorded growth in 12 out of 20 sectors.
Contact Accountancy Insurance
We would love to hear from you.
About Accountancy Insurance
Thousands of accounting firms offer our tax audit insurance solution, Audit Shield to their clients.
Find out why.