Canada’s real gross domestic product (GDP) declined by 0.2% in February, partially offsetting January’s 0.4% growth, according to the latest report from Statistics Canada released Wednesday.
The contraction was led by goods-producing industries, which fell 0.6% after driving growth in January. The mining, quarrying, and oil and gas extraction sector emerged as the largest drag on growth, contracting 2.5% following two consecutive monthly increases.
“February’s decline was broad-based with 12 of 20 industrial sectors showing decreased activity,” the report stated.
Resource sector hit by multiple factors
Oil and gas extraction contracted 2.8%, completely reversing January’s 2.6% expansion. Oil sands extraction fell 3.8% due to lower crude bitumen and synthetic crude production, marking the largest monthly contraction in the industry since January 2024.
Conventional oil and gas extraction decreased 1.8%, impacted by lower crude petroleum extraction in Alberta and reduced offshore production in Newfoundland and Labrador. Statistics Canada noted that “harsh weather in the North Atlantic ocean and a collision between an oil tanker and a transhipment terminal” disrupted production.
Mining and quarrying activity declined 2.6%, with coal mining plunging 14.8% amid reduced exports to Asian markets. Metal ore mining fell 2.5%, continuing a downward trend from January.
Construction and real estate sectors weaken
Construction activity contracted 0.5%, breaking a four-month growth streak as most construction categories declined. Residential building construction fell 0.9%, recording its largest decrease since April 2024, reflecting reduced home alterations and improvements along with lower construction of single-family and row houses.
The real estate sector contracted 0.4% in February, its largest decline since April 2022. Activity at real estate brokerages and related services plummeted 10.4% for the third consecutive month, pushing activity to levels last seen in December 2023 as “home resale activity in many markets across the country continued to cool.”
Manufacturing provides bright spot
Manufacturing rose 0.6% in February, increasing for the second consecutive month. Machinery manufacturing surged 5.9%, posting its highest increase since February 2023. Transportation equipment manufacturing grew 0.7%, with motor vehicle parts manufacturing up 4.2%, coinciding with higher exports.
The finance and insurance sector increased 0.7%, rising for the third consecutive month, driven by financial investment services, funds, and other financial vehicles, which grew 2.7% amid increased market activity.
Outlook for March and Q1
Statistics Canada’s advance estimate indicates real GDP increased 0.1% in March, with increases in mining, quarrying, and oil and gas extraction, retail trade and transportation partially offset by decreases in manufacturing and wholesale trade.
With this advance estimate, information suggests the economy expanded 0.4% in the first quarter of 2025, with official figures set for release on May 30.
