The Canadian financial system grew a modest 0.2 per cent in February, with early estimates for March indicating little change to the GDP, Statistics Canada stated on Tuesday.
The February figures have been a tick decrease than analysts anticipated. The financial system had a robust January, rising 0.5 per cent (downwardly revised from 0.6 per cent). That was largely due to a rebound in academic companies after public sector strikes resulted in Quebec.
“The beginning of 2024 seems eerily much like 2023, when the financial system began the yr with a bang, solely to stall after [the first quarter],” wrote BMO economist Benjamin Reitzes in a word.
The lack of momentum places extra strain on the Financial institution of Canada to start out slicing rates of interest in June, although a transfer on the central financial institution’s half nonetheless largely depends upon whether or not inflation continues to chill, Reitzes wrote.
The patron worth index reveals inflation was at 2.9% in March in comparison with the yr earlier than, a slight enhance in comparison with February. Statistics Canada stated gasoline costs, mortgage curiosity prices and lease contributed to the elevated inflation price.
StatsCan estimated that the financial system expanded at an annualized price of two.5 per cent within the first quarter.
Features in transportation and warehousing
The financial growth in February got here as services-producing industries elevated 0.2 per cent, helped by features in transportation and warehousing.
Transportation and warehousing grew 1.4 per cent, a tempo that the info company stated was the biggest month-to-month progress price since January 2023.
Rail transportation additionally contributed considerably to that sector’s progress in February, eking out a 5.5 per cent acquire because it rebounded from a January chilly snap.
In the meantime, air transportation grew 4.8 per cent as demand for worldwide journey rose, with airways including extra flights to Asia within the lead-up to the Lunar New 12 months — and pipeline transportation rose 1.6 per cent, offsetting January’s decline.
Items-producing industries have been basically unchanged because the mining, quarrying, and oil and gasoline extraction sector grew and the utilities and manufacturing sectors contracted, in response to StatsCan.
The general public sector grew at a slower tempo in February (0.2 per cent) after a 1.9 per cent enhance the earlier month.
General, the company recorded progress in 12 out of 20 sectors.
