Canadian economy grew 0.2% in February

The Canadian economy grew a modest 0.2 per cent in February, with early esti‐ mates for March indicating little change to the GDP, Statistics Canada said on Tuesday.

The February figures were a tick lower than analysts ex‐ pected. 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.

"The start of 2024 looks eerily similar to 2023, when the economy started the year with a bang, only to stall after [the first quarter]," wrote BMO economist Benjamin Reitzes in a note.

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 de‐ pends on whether inflation continues to cool, Reitzes wrote.

WATCH | Canada's head‐ line inflation ticked up to 2.9 per cent in March:

StatsCan estimated that the economy expanded at an annualized rate of 2.5 per cent in the first quarter.

Gains in transportation and warehousing

The economic expansion in February came as servicesproducing industries in‐ creased 0.2 per cent, helped by gains in transportation and warehousing.

Transportation and ware‐ housing 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 Febru‐ ary, eking out a 5.5 per cent gain as it rebounded from a January cold snap.

Meanwhile, air trans‐ portation 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 trans‐ portation rose 1.6 per cent, offsetting January's decline.

Goods-producing indus‐ tries were essentially un‐ changed as the mining, quar‐ rying, and oil and gas extrac‐ tion sector grew and the utili‐ ties and manufacturing sec‐ tors 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.