Canada’s economy grew 0.1% in January, continuing a slow start to the year with limited momentum across key sectors.
Goods-producing industries rose 0.2% for a second straight month, driven by gains in oil and gas, construction, and utilities.
Oil and gas extraction increased 1.6%, reversing a decline in December. Higher crude production in Newfoundland and Labrador and Saskatchewan, along with stronger natural gas output, supported the gain. Mining outside oil and gas also edged higher, with coal and potash contributing to the increase.
Construction expanded 1.1%, marking a third consecutive monthly gain. Engineering projects and repair work led the growth, while residential construction rose on increased spending on renovations and multi-unit housing. Non-residential building also continued to climb, supported by institutional and commercial projects.
Manufacturing fell 1.4%, giving back gains from the previous month. Durable goods production declined 2.0%, led by sharp drops in transportation equipment and machinery. Motor vehicle and parts manufacturing fell 10.8%, as extended shutdowns and retooling at assembly plants reduced output and exports.
Wholesale trade declined 1.2%, the third drop in four months. Lower activity in motor vehicle and parts sales drove the decrease, reflecting weaker exports and reduced auto production. Gains in building materials provided only partial support.
Retail trade rose 0.8%, with six of nine subsectors posting increases. General merchandise stores led the gains, followed by higher sales at motor vehicle and parts dealers.
Finance and insurance increased 0.5%, supported by stronger trading activity in equity and fixed-income markets, including higher demand for Canadian bonds.
Transportation and warehousing fell 0.7%, as winter storms disrupted transit systems, flights, and freight movement. Declines were also linked to reduced activity in the auto sector, affecting trucking and related services.
Real estate and rental and leasing declined 0.2%, the first drop in 10 months. Activity at real estate offices fell sharply, reflecting lower home resale activity across the country, particularly in Ontario and British Columbia. Legal services, which depend on real estate transactions, also declined.
An early estimate points to a 0.2% increase in February, with gains in manufacturing, resource activity, and finance expected to offset weakness in agriculture.