(OTTAWA) Economic growth resumed in January after contracting slightly in December, Statistics Canada said Friday. A surprise for many economists.
Gross domestic product rose 0.5% in the first month of the year, after contracting 0.1% in the last month of 2022, the federal agency said.
Statistics Canada’s preliminary forecast for the month of February foresees growth of 0.3%, but it recalled that this data would be revised before its official publication, in a month.
There were plenty of indications that the economy was off to a strong start in 2023, but today’s burst of strength is well above the most optimistic views.
Douglas Porter, Chief Economist of the Bank of Montreal
“Even if growth stalls in March, it now looks like the first quarter will show growth of 2.5%, compared to a flat reading in the fourth quarter, according to Porter. As we continue to expect a noticeable slowdown over the next two quarters, we are increasing our GDP growth estimate for the whole of 2023 […] at 1.0%. »
At Desjardins, we believe that January’s strong real GDP growth and continued momentum through February leave little room for ambiguity. “The Canadian economy started the year on very solid footing. We now expect real GDP growth of close to 3% [à rythme annualisé] in the first quarter, which is well above the 0.5% growth estimated by the Bank of Canada in its Monetary Policy Report January 2023,” said Randall Bartlett, Senior Director, Canadian Economy at Desjardins.
As a result, the economist said he expects the central bank to significantly revise its short-term forecast upwards when it comes out in a week and a half.
Figures broken down
Goods-producing industries rose 0.4% in January, while service-producing industries rose 0.6%.
Statistics Canada pointed out that many of January’s main growth drivers were also the biggest contributors to December’s decline.
January’s growth was driven by wholesale trade, transportation and warehousing, mining, quarrying, and oil and natural gas extraction, all of which declined. in December.
Wholesale trade advanced 1.8% in January, supported by machinery, equipment and supplies merchant wholesalers, while the mining, quarrying and quarrying sector petroleum and natural gas rose 1.1% after falling 3.3% in December.
The transportation and warehousing sector rose 1.9% in January, more than offsetting its 1.1% decline in December, which was attributed to poor weather conditions.