Statistics Canada is projecting that the economy grew at an annualized 1.5% in this year’s first quarter.
That forecast comes after the Canadian economy contracted 0.2% in February after growing
0.4% in January.
The Ottawa-based statistics agency said that early signs point to modest growth in Canada’s gross domestic products (GDP) during March.
The result is that Canada’s economy likely grew a modest 1.5% on an annualized basis in the year’s first three months, avoiding a contraction that could lead to a recession.
Final data for March and the first quarter will be released by Statistics Canada later in May.
As for February, Statistics Canada said that the contraction was driven by a 0.6% decline for goods-producing industries that include mining, quarrying, and oil and gas extraction.
Following two consecutive monthly increases, goods-producing industries fell 2.5% and became the largest detractor from Canada’s growth in February.
Construction, which was down 0.5%, fell for the first time in four months during February.
Services-producing industries edged 0.1% lower as declines in transportation and warehousing, along with real estate, were partially offset by a rise in finance and insurance.
One of the few bright spots for the economy in February was manufacturing, which picked up due to increased demand from U.S. buyers trying to get ahead of import tariffs.
Overall, Canada’s manufacturing sector rose 0.6% in February, increasing for the second month in a row, largely driven by durable-goods industries.
Machinery manufacturing grew 5.9% and contributed most to the increase in that category.
Statistics Canada’s early estimate indicates that GDP increased 0.1% in March amid gains in mining, quarrying, oil and gas extraction, and retail sales.