Canadian economy contracts in February
First monthly decline since September, manufacturing output slips.
OTTAWA — The Canadian economy dipped in February, marking its first contraction since September, after the blistering pace it set to kick off the year.
Statistics Canada said real gross domestic product edged down 0.1% in February compared with growth of 0.6% in January.
The decline followed four consecutive months of growth and matched the expectations of economists, according to Thomson Reuters.
“While a decline in monthly GDP is never great news, this one was largely expected and doesn’t fully detract from the pleasant surprise in growth around the turn of the year,” Bank of Montreal chief economist Doug Porter said.
“With the strong start to the year, with oil prices well off the lows, and with fiscal stimulus hurtling down the pike, we are looking at GDP growth of 1.8% for all of 2016.”
The Bank of Canada recently raised its forecast for growth this year to 1.7% due to the planned spending boost by the federal government announced in the budget.
The spending by Ottawa is expected to offset some of the damage done by the drop in oil prices.
Statistics Canada said the output of goods-producing industries fell in February, while the service sector was essentially unchanged.
Goods-producing industries contracted 0.6% in the month, due to lower results in manufacturing and mining, quarrying, and oil and gas extraction.
Manufacturing output fell 0.8% after rising for three months as durable goods fell 1.8% and non-durable goods rose 0.4%.
The service side of the economy saw a drop in wholesale sales offset by gains in retail sales as well as the public sector and accommodation and food services.
Wholesale trade contracted 1.8% due to weakness in wholesalers of machinery, equipment and supplies, followed by the motor vehicles and parts and building material and supplies subsectors. Retail trade grew by 1.4%.
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