Canada: Economic growth decelerates in January
GDP reading: GDP was up 0.1% in seasonally adjusted month-on-month terms in January, following 0.2% growth in the prior month and above market expectations for a flat reading.
Drivers: Gains in mining, energy, construction and utilities drove January’s expansion, partly offset by declines in manufacturing and transport—the latter was linked to extreme weather conditions.
GDP outlook: GDP rose 0.2% month-on-month in February according to a flash estimate, driven by gains in manufacturing, mining and quarrying, and financial services, which outweighed declines in agriculture and forestry.
Panelist insight: On the data and outlook, TD Economics’ Marc Ercolao said:
“Canada’s economy looks to be off to a slightly better-than-expected start in 2026 after a lackluster fourth quarter. With January’s print and a flash estimate for February, Q1-2026 growth is tracking in-line with historical trend growth, a view shared by both us and the Bank of Canada. It’s worth noting that quarterly expenditure-based GDP growth has been particularly volatile due to sharp movements in trade and inventories, something not well captured in the monthly industry GDP accounts.”