Canada's gross domestic product edged up by 0.2 per cent in February, driven by a rebound in the manufacturing sector, according to new data released by Statistics Canada on Thursday. Preliminary estimates suggest the economy grew in the first quarter of 2026, reversing the momentum from a contraction that ended 2025.
Manufacturing Leads the Way
The February growth was primarily fueled by goods-producing industries, which expanded by 0.4 per cent. Manufacturing, in particular, regained momentum after a sluggish period, contributing significantly to the overall increase. The sector's performance was supported by higher output in durable goods, including machinery and transportation equipment.
First Quarter Outlook
Preliminary estimates for the first quarter of 2026 indicate that the economy grew by 0.4 per cent, a marked improvement from the contraction seen in the final quarter of 2025. However, Statistics Canada cautioned that these figures are subject to revision, with an official estimate for the first quarter expected in late May.
March Performance
Initial estimates for March suggest that GDP was “essentially unchanged” for the month. Gains in wholesale trade, transportation, and warehousing were offset by declines in retail trade and resource extraction. The agency noted that the March data could also be revised as more information becomes available.
Economists remain cautiously optimistic about the trajectory of Canada's economy, with the manufacturing sector's recovery seen as a positive sign. However, ongoing challenges in retail and resource sectors may temper the pace of growth in the coming months.
