Real GDP up 0.2 per cent in January, led by manufacturing: Statscan

Ottawa (CP) — A surprisingly strong manufacturing sector was the driving force behind the Canadian economy’s return to modest growth in January after ending 2012 with a mild contraction in December, says Statistics Canada.

The federal agency reported Thursday Canada’s gross domestic product grew by 0.2 per cent in the month after shrinking 0.2 per cent in December.

Manufacturing was the biggest contributor, with the sector’s output expanding 1.2 per cent in January following a 1.9 per cent decline in December.

CIBC World Markets economist Emanuella Enenajor said the Statistics Canada report was slightly above the consensus estimate, with the manufacturing sector showing surprising strength given reports of softer sales.

“While the data suggest Q-1 GDP could track somewhere in the neighbourhood of 1.5 per cent — an acceleration from the pace seen in prior quarters, that’s still softer than the Bank of Canada’s outlook,” Enenajor said in a brief note.

In the central bank’s latest outlook, the Bank of Canada says it expects growth to gain momentum as the year progresses and result in 2.0 growth in GDP this year followed by 2.7 per cent growth in 2014 — more optimistic than other estimates.

The Organization for Economic Cooperation and Development said Thursday that it expected the Canadian economy to expand 1.1 per cent in the first three months of this year and by 1.9 per cent in the second quarter.

Statistics Canada reported goods production in January grew 0.4 per cent as mining, quarrying and oil and gas extraction also increased. There were declines in agriculture, forestry and construction.

The output of service industries was up 0.2 per cent in January, mainly as a result of gains in wholesale trade, arts and entertainment and the public sector.