Canada’s economy unexpectedly contracted by -0.1% mom in March, missing expectations for a 0.1% expansion and partially reversing February’s 0.2% gain. The weakness was concentrated in goods-producing industries, which fell -0.8% and recorded their fifth decline in the past six months.
Lower activity in mining, quarrying, oil and gas extraction, as well as construction, accounted for much of the pullback. Services-producing industries provided some support, edging up 0.1% on stronger wholesale trade, but the gains were not enough to offset the broader weakness, with 8 of 20 industrial sectors posting declines.
The disappointing March figure capped a sluggish first quarter, with real GDP unchanged after a -0.2% contraction in Q4. Meanwhile, GDP per capita rose 0.2% qoq as Canada’s population declined for a second consecutive quarter.
There was also a more encouraging signal from the start of Q2. Statistics Canada’s advance estimate points to a 0.4% increase in April GDP, driven by gains in mining, oil and gas extraction, manufacturing, and transportation and warehousing. While some sectors, including agriculture and forestry, remained weak, the early rebound suggests March’s contraction may prove temporary rather than the start of a broader downturn.
| Indicator | Previous | Actual | Expected |
|---|---|---|---|
| March GDP (MoM) | 0.2% | -0.1% | 0.1% |
| April GDP (Advance Estimate) | -0.1% | 0.4% | |
| Q1 GDP (QoQ) | -0.2% (Q4) | 0.0% | |
| GDP Per Capita (QoQ) | N/A | 0.2% |
