Canada’s gross domestic product (GDP), a measure of the goods and services produced in the country, grew 0.4% in January, building on a 0.3% advance in December of last year.
However, an advance reading of February GDP shows that there was no change during that month, suggesting that the Canadian economy might be slowing down.
In January, increases in the manufacturing and finance sectors offset declines in real estate and among retailers across Canada.
Statistics Canada said that both goods and service-producing industries were up to start the year, with 13 of 20 sectors rising during January.
Goods-producing industries contributed the most to the economic expansion, rising 1.1%, which was the largest increase since October 2021.
Canada’s service-producing industries rose only 0.1% in January.
The mining, quarrying, and oil and gas extraction sector grew 1.8%, with all three subsectors expanding in the month.
Canada’s manufacturing sector rose 0.8% in January, following two consecutive monthly declines, as activity in durable goods rebounded.
The utilities sector was among the top contributors to growth for a second consecutive month, expanding 2.7% in January after a 5% increase last December.
Construction activity rose 0.7% in January as most types of building activity increased.
Residential building construction gained 1.4% in January and was the largest contributor to the monthly increase.
Greater construction activity in Ontario and more home improvements drove the construction increase in January, said Statistics Canada.
On the flipside, retail sales were the largest detractor to growth in January following strong year-end growth during the December holidays.
Retail sales in Canada contracted 0.9% in January as activity in six of 12 subsectors decreased.
However, wholesale trade increased 0.7% in January, as most subsectors grew. Motor vehicle and parts wholesalers gained 4.5% and was the main contributor to growth in that sector.
The preliminary stagnant GDP reading for February might be due to ongoing trade issues and import tariffs imposed by the neighbouring U.S. government.