Canada’s gross domestic product edged up by 0.2 per cent in February and preliminary figures suggest the economy grew in the first quarter, reversing the momentum from a contraction that ended 2025.

The new data, released by Statistics Canada on Thursday, showed February’s growth was primarily driven by goods-producing industries, which expanded by 0.4 per cent.

Initial estimates for March also suggests that GDP was “essentially unchanged” for the month, with increases in the wholesale trade as well as transportation and warehousing sectors offset by decreases in retail and resource extraction.

Preliminary estimates for the first quarter of 2026 suggest the economy grew by 0.4 per cent. However, the agency said those figures could change, and an official estimate for the first quarter is expected in late May.

The manufacturing sector led the growth in February, accelerating by 1.8 per cent during the month, the sector’s largest gain since January 2023.

This growth was mainly driven by an expansion in manufacturing of durable goods, such as machinery and transportation equipment.

Wholesale trade grew by 0.9 per cent for the month, driven by increases in motor vehicle production and higher exports and imports of passenger cars, light trucks and motor vehicle engines and parts. A rebound in personal and household goods further contributed to growth, mainly driven by pharmaceuticals and pharmacy supplies.

Mining, quarrying and oil and gas extraction grew by 0.4 per cent, the second consecutive monthly increase, driven by an increase in oil and gas extraction.

Other sectors that expanded included transportation and warehousing, up 1.2 per cent, and finance and insurance, up 0.3 per cent.

Notably, the public sector contracted by 0.3 per cent in February, following three monthly increases in a row. Public administration contributed most to this decline, with activity down on all levels of government.

The arts, recreation and sports sector also contracted by 2.5 per cent in February. StatsCan said this coincided with a two-week break in the NHL when many players participated in the Winter Olympics.

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The data comes a day after the Bank of Canada held its key interest rate at 2.25 per cent for the fourth time, but warned it would be closely monitoring the impact and uncertainty rising oil prices may have on inflation in the coming months.

The central bank projected t hat Canada’s economy will accelerate from 1.2 per cent in 2026 to 1.6 per cent in 2027 and then 1.7 per cent in 2028.

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