Canada’s economy rebounded more than economists forecast in February, as idled oil and auto production came back on line.
Gross domestic product expanded 0.4 percent during the month following a 0.1 percent contraction in January, Statistics Canada reported Tuesday in Ottawa. Economists anticipated a 0.3 percent gain.
The bounce back provides some reassurance the economy is poised to emerge from a recent soft patch of growth, particularly given broad-based gains in key sectors such as manufacturing and signs that rail bottlenecks may be dissipating.
Most economists forecast the economy grew by less than 2 percent in the first quarter, before returning to above-2 percent growth for the rest of the year. The Bank of Canada estimates first-quarter growth of 1.3 percent, before the expansion accelerates to well above 2 percent in the second quarter.
The GDP numbers for the first two months suggest there is potential for an upside surprise in the first quarter, with the economy tracking just under an annualized 2 percent pace currently.
Extraction from the oil sands was up 3 percent as production returned to normal following shutdowns in January Excluding energy, GDP in February was up 0.3 percent following a 0.1 percent gain in January Manufacturing was up 1 percent, driven higher by autos as production in that sector returned to normal following shutdowns Strong home building to start the year helped drive up activity in the construction sector by 0.7 percent Rail transportation — which has been an issue for Canada this year — edged down 0.1 percent, much better than the 3.4 percent decline in January The real estate sector remains a drag on the economy after tighter mortgage rules were introduced at the start of the year. Activity of real estate agents and brokers fell 7.9 percent in February after a 12.9 percent drop in January Goods-producing industries were up 1.2 percent, versus 0.1 percent for services Fifteen of 20 industrial sectors recorded higher activity in February