Canada: Economic activity contracts in February
The economy shrank 0.1% month-on-month in February, contrasting January’s 0.3% expansion and missing analysts’ expectations of a flat reading. According to Statistics Canada, only 11 out of the 20 industrial sectors posted gains over the previous month, with both the transportation and the mining and quarrying and oil and gas extraction sector declining sharply.
On an annual basis, growth ticked down to 1.1% in February from 1.6% in the previous month, while annual average growth inched down to 1.8% from 1.9% in January.
Commenting on February’s print, Brian DePratto, a senior economist at TD Economics, noted:
“It looks like we may be in the soft patch for a bit, particularly as trade and transportation sector data suggests little destocking in the energy sector despite production curtailments. This suggests a risk of another subpar performance in the second quarter. The good news, however, is that the underlying economic signals remain generally healthy, with construction activity rising for a second month, and some modest signs of life in investment.”