February GDP rose a robust 0.3%, according to figures released this morning by Statistics Canada, which was stronger than the 0.2% gain expected going into the report.
As well, the January monthly increase was revised up to 0.3% from a previously-estimated 0.2% gain. The revision largely reflected a sizable upward revision to growth in the retail trade sector to 1.3% from the previously-estimated 0.1% increase.
The agency said strength in February was largely concentrated in the goods-producing industries where output jumped 0.9% in the month and built further onto a 0.3% gain in January. Within the goods sector the strength was led by gains in mining (2.2%), manufacturing (0.8%) and agriculture (0.5%). The mining component was helped by a 21.9% surge in potash production in the month.
Service-producing industries saw a negligible increase of just 0.1% though this followed a stronger 0.3% rise in January. The increase was restrained by a 0.2% drop in wholesale trade and a modest 0.1% rise in retail trade though both followed relatively strong gains in January.
Experts at RBC Economics assert, "the back-to-back gains in monthly GDP are consistent with our forecast of a strengthening in the Q1 annualized growth to 1.9% relative to disappointing gains in the fourth and third quarters of last year of 0.6% and 0.7%, respectively.
"With inflation continuing to run below the central bank’s mid-range target of 2%, policy is expected to remain highly accommodative in order to engender greater momentum in growth going forward."
