Economy outperforms in January; manufacturing leads broad-based growth

January-GDP-Statistics-Canada-economy-manufacturing-oil-exports-mining-motor-vehicles-economy-EDIWeekly

Canada’s economy performed better than expected in January, turning out a 0.6 per cent increase in GDP. It was the fourth consecutive monthly increase, and the manufacturing sector was the biggest contributor, Statistics Canada reports. Retail trade, mining, quarrying and oil and gas extraction were also major contributors to the growth.

The growth in manufacturing was an impressive 1.9 per cent in January, following a 1.1 per cent gain in December. Broken down further, durable goods manufacturing was even stronger, rising 2.6 per cent, notably in motor vehicles and parts, metal products and mineral products.

Oil and gas extraction grew for the fourth consecutive month, as did support activities for the mining and oil and gas industries. However, the Bank of Canada cautioned that despite the strong oil output, the energy slowdown is not over; there could be more job losses in the oilpatch, and those losses will continue to drag on the economy.

In other sectors, retail trade expanded 1.5 per cent; utilities were up 2.7 per cent; finance and insurance grew 0.6 per cent; construction grew 0.5 per cent; and the public sector, including education, health and public administration, increased 0.2 per cent.

January-GDP-Statistics-Canada-manufacturing-oil-exports-mining-motor-vehicles-economy-EDIWeekly
Gross domestic product rises in January. Source: Statistics Canada

Economists at Canada’s major banks have called the growth in January “staggering” and “rip-roaring” and “the most encouraging in recent memory.” The vice president of Scotiabank Economics commented that the economy is in “fine shape overall.”

The growth, especially in the manufacturing sector, is what Bank of Canada Governor Steven Poloz has been predicting for months, saying that Canada’s low dollar and the improving economy in the United States would eventually pay off in higher exports of non-resource products.

Economists also see reason for optimism in the stimulus spending coming from the federal government. The combination of massive government spending and the strengthening economic activity across most major sectors is seen as a near-certain indication that the economy will achieve at least 2 per cent GDP growth in 2016.

Did you miss this?

Other Popular Stories

  • CSeries engine problem just an oil seal leak: Pratt & Whitney
  • Toronto company seeking to market energy storage system
  • Membraneless flow battery shows great promise for cheaper energy storage
  • Electric bush plane: combined project of Zenair and Solar Ship combines rugged short landings with green technology
  • Renault's autonomous float hover car by Yunchen Chai may be the automobile of the future — winner of a design competition from Renault
  • Pratt & Whitney Canada to invest $275 million in Quebec plant
  • Canada one of the world’s most energy-intensive countries: 15 percent energy reduction possible through lighting, computer and HVAC retrofitting: Conference Board of Canada Report
  • Manufacturing slowdown reflects oil and dollar declines
  • Building permits shot up in May
  • 99.99% of Salt Removed from Sea Water with Innovative Nano-Filter — Important with Changing Global Weather
  • Chrysler expanding Windsor assembly plant for "future vehicle"
  • Resource-based provinces lead in wage gains
  • Pembina to build $350 million diluent hub
  • World's largest gate valves will operate in Texas water pipeline
  • Cars and oil pulled Canada's manufacturing down in September
  • Tesla phenomenon will change both how cars are imagined and sold
  • New national aerospace consortium to foster leadership in technology
  • Petronas to spend $16 billion to export Western Canadian LNG
  • Pratt & Whitney Canada engines to power new Gulfstream jets
  • Publication aimed at development CEOs names Ontario best investment location in Canada
Scroll to Top