Canada's economy saw slight growth in January with gains in mining, oil and gas

Canada's economic system saw cold-shoulder ontogeny in jan, as gains in goods-producing industries countervail a slowdown in manufacturing, Statistics Canada said on Tuesday.

GDP grew by a modest 0.1 per cent that month, beating analysts' expectations after the economy grew 0.2 per cent in December.

Mining, oil and gas extraction and quarrying were largely responsible for the monthly growth, expanding 1.2 per cent and undoing declines from December.

The growth in oil and gas was the result of increased crude petroleum extraction in Newfoundland and Labrador, as well as Saskatchewan. Natural gas extraction also expanded.

The construction sector grew 1.1 per cent in January, up for a third month in a row, with expansions in both residential and non-residential building construction.

Douglas Porter, chief economist at the Bank of Montreal, called the report a "pleasant surprise."

"Canadian real GDP was firmer than expected in the first two months of the year, despite a seemingly endless winter and a slew of weak headline results from manufacturing and employment early in 2026," Porter wrote in a note to clients.

"Of course, this decent performance preceded the conflict in Iran and the consequent spike in gasoline and other fuel prices, but it suggests the economy was in somewhat better shape than anticipated heading into the turmoil."

However, manufacturing declined in January, erasing more growth than it gained in December because of weakness in the durable goods subsector.

Wholesale trade also declined, mostly for motor vehicles and their parts, as exports of passenger cars and light trucks fell due to a seasonal pullback in auto production. Weather conditions weighed on the transportation and warehousing sectors.

Services-producing industries like real estate, health care and finance — all major contributors to the Canadian economy — saw little change during the month.

The data agency said that its advance estimate for February is a 0.2 per cent increase in real GDP, but that figure is subject to change.

Both January's figures and the advance estimate for February set a "much better tone" for the first quarter than initially expected, wrote Porter.

Economists have said that growth could take a bigger hit in the coming months as the impact of high crude oil prices due to the war in Iran curtails consumer spending and spikes inflation.

It could also force the Bank of ⁠Canada to hike interest rates ‌at a time of economic weakness.

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