Statistics Canada says the Canadian economy was off to a solid start in January but early signs suggest growth hit a wall in February.
The agency said Friday that real gross domestic product rose 0.4 percent in January thanks largely to a boom in the oil and gas, quarrying and mining industries.
That marks an acceleration from 0.3 percent growth in December, a figure that was revised up a tenth of a percentage point.
Canada’s goods-producing industries were particularly hot in January, rising 1.1 percent for their biggest one-month jump in over three years.
The manufacturing, utilities and construction sectors all recorded growth in January, StatCan said, and the services side of the economy also edged up 0.1 percent.
StatCan said a slowdown in retail trade weighed on GDP to start 2025 following strong growth in December.
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The agency’s early estimates have growth essentially unchanged in February.
Andrew Grantham, senior economist at CIBC, said in a note to clients Friday that the February slowdowns are likely tied to harsh winter weather throughout Canada and the end of Ottawa’s sales tax holiday mid-month.
The uptick in January, on the other hand, could be better explained as Canadian businesses “front-running” U.S. tariffs, which were threatened regularly over the month before coming into partial effect in March.
“We expect that tariffs will have a clearer negative impact on GDP in March and during Q2,” Grantham said.
President Donald Trump is targeting vehicles made outside the U.S. in his latest round of tariffs announced yesterday.
