Canadian economy shrinks in February, but rebound expected, says report
PTC Web Desk: According to a report from CBC News citing Statistics Canada, the Canadian economy contracted by 0.2% in February 2025, reversing some of the gains from January's 0.4% growth. The dip was largely attributed to broad-based declines across several industries, most notably in the goods-producing sectors, which dropped by 0.6%.
The mining, quarrying, and oil and gas extraction sector led the downturn, experiencing a significant 2.5% decrease. Service-producing industries also saw a modest dip of 0.1%, with construction falling by 0.5% — its first decline in four months — and real estate, rental, and leasing down 0.4%.
In total, 12 out of 20 industrial sectors saw a drop in activity, highlighting the breadth of the slowdown. However, there were pockets of resilience. The manufacturing sector grew by 0.6%, and the finance and insurance sector rose for the third consecutive month, posting a 0.7% gain, offering some offset to the overall economic slide.
Statistics Canada pointed to severe winter weather across central and eastern Canada and British Columbia as a key contributor to the downturn, particularly impacting transportation and warehousing, which saw a 1.1% decline.
Preliminary estimates from the agency suggest a slight rebound in March, with real GDP expected to grow by 0.1%. Based on this flash estimate, the annualized GDP growth rate for the first quarter of 2025 stands at 1.5%.
Douglas Porter, chief economist at BMO Financial Group, emphasised that weather, not economic fundamentals, was to blame for February’s drop. “The rebound in March reinforces the point that much of February's drop was weather-related and not really a sign that the economy was buckling due to trade uncertainty,” Porter noted. However, he cautioned that the second quarter of the year may reveal more concrete effects of the ongoing trade tensions with the U.S., and any positive growth in that period would come as a surprise.
Source: CBC News
- PTC NEWS
