The Canadian economy grew a modest 0.2 per cent in February, with early estimates for March indicating little change to the GDP, Statistics Canada said on Tuesday.
The February figures were a tick lower than analysts expected. The economy had a strong January, growing 0.5 per cent (downwardly revised from 0.6 per cent). That was largely thanks to a rebound in educational services after public sector strikes ended in Quebec.
“The start of 2024 looks eerily similar to 2023, when the economy started the year with a bang, only to stall after [the first quarter],” wrote BMO economist Benjamin Reitzes in a note.
The loss of momentum puts additional pressure on the Bank of Canada to start cutting interest rates in June, though a move on the central bank’s part still largely depends on whether inflation continues to cool, Reitzes wrote.
WATCH | Canada’s headline inflation ticked up to 2.9 per cent in March:
Canada’s inflation rate ticks up to 2.9% in March
16 days ago
Duration 1:32
The consumer price index shows inflation was at 2.9% in March compared to the year before, a slight increase compared to February. Statistics Canada said gasoline prices, mortgage interest costs and rent contributed to the increased inflation rate.
StatsCan estimated that the economy expanded at an annualized rate of 2.5 per cent in the first quarter.
Gains in transportation and warehousing
The economic expansion in February came as services-producing industries increased 0.2 per cent, helped by gains in transportation and warehousing.
Transportation and warehousing grew 1.4 per cent, a pace that the data agency said was the largest monthly growth rate since January 2023.
Rail transportation also contributed significantly to that sector’s growth in February, eking out a 5.5 per cent gain as it rebounded from a January cold snap.
Meanwhile, air transportation grew 4.8 per cent as demand for international travel rose, with airlines adding more flights to Asia in the lead-up to the Lunar New Year — and pipeline transportation rose 1.6 per cent, offsetting January’s decline.
Goods-producing industries were essentially unchanged as the mining, quarrying, and oil and gas extraction sector grew and the utilities and manufacturing sectors contracted, according to StatsCan.
The public sector grew at a slower pace in February (0.2 per cent) after a 1.9 per cent increase the previous month.
Overall, the agency recorded growth in 12 out of 20 sectors.
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
