{"id":10233,"date":"2026-04-30T14:25:31","date_gmt":"2026-04-30T14:25:31","guid":{"rendered":"https:\/\/www.rbc.com\/en\/economics\/?p=10233"},"modified":"2026-05-04T13:29:30","modified_gmt":"2026-05-04T13:29:30","slug":"canadian-economy-maintains-momentum-in-february-as-temporary-drags-fade","status":"publish","type":"post","link":"https:\/\/www.rbc.com\/en\/economics\/canadian-analysis\/data-flashes\/canadian-economy-maintains-momentum-in-february-as-temporary-drags-fade\/","title":{"rendered":"Canadian economy maintains momentum in February as temporary drags fade"},"content":{"rendered":"\n
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The Bottom Line:<\/h4>\n\n\n\n

Canada’s GDP growth increased 0.2% in February, matching Statistics Canada’s advance estimate and our own expectations. Both goods-producing and services industries contributed to the gain as temporary disruptions in the auto sector in January started to unwind. Manufacturing and wholesale trade rebounded as auto production normalized following earlier model changeover shutdowns, while retail GDP advanced 0.2%, pointing to ongoing resilience in consumer spending.<\/p>\n\n\n\n

Weak spots in February were concentrated in construction, the public sector, and an added decline in entertainment attributed to the two-week break in NHL games during the Olympics.<\/p>\n\n\n\n

Looking ahead, the advance estimate for March GDP was “essentially unchanged.” Those early estimates are highly revision-prone, but early indicators for March suggest growth momentum has held steady into the end of Q1. Hours worked edged higher by 0.2%, while advance manufacturing sales rose 3.5% in March\u2014in part reflecting higher petroleum prices, but also consistent with further recovery in auto production. Excluding petroleum and related products, advance wholesale sales also rose 1.3%.<\/p>\n\n\n\n

On a quarterly basis, activity remains broadly consistent with our base case for moderate expansion, with Q1 GDP tracking slightly higher than our own forecast of 1.3% annualized GDP growth, as well as the Bank of Canada’s 1.5% projection in its April Monetary Policy Report. With population growth slowing, per-capita improvement is expected to continue. For the Bank of Canada, our base case remains unchanged: we expect the BoC to hold rates steady for the remainder of 2026, although the central bank signaled at its April meeting that it will be keeping a close eye on the evolution of underlying inflation (ex-energy) measures and broader economic growth implications from higher energy costs due to the ongoing conflict in the Middle East.<\/p>\n\n\n\n

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The Details:<\/h4>\n\n\n\n