Canada’s economy on pace to rebound in the first quarter

February 2026 GDP: Canada’s economy on pace to rebound in the first quarter

GDP February 2026

April 30, 2026

2 min read

Progress continued in February, with the Canadian economy on track to exceed growth expectations this year. The BDL nowcast for GDP points to a softer first quarter, at just 1.2%, but it’s encouraging to see sectors like manufacturing and transportation leading growth after a period of weakness. We’ll need to see continued expansion in capacity utilization overall to know that there is a stabilization in trade-exposed sectors production. Overall, it was a solid month and broadly aligns with the Bank of Canada’s outlook, reinforcing yesterday’s decision to hold interest rates.

KEY TAKEAWAYS

Real GDP accelerated by 0.2% in February, building on momentum from January putting the Canadian economy on pace to grow 1.6% in the first quarter. Goods-producing sectors expanded by 0.4% for the third month while services grew at a slower 0.1% pace. Recent strength in goods-producing sectors was supported by durable goods activity. Statistics Canada expects GDP to be flat in March.

The manufacturing sector grew 1.8% on the month—the fastest growth since January 2023, led by machinery equipment and metalworks which expanded by 9%. The autos sector also recovered from prolonged assembly plant Fall shutdowns. It’s too early to tell if recent strength is showing a stabilization in the sector but a consistent increase in unfilled orders and the breadth of momentum are encouraging.

Transportation and warehousing sector has been volatile over the past year. It rebounded by 1.2% in February with strength from both truck and rail transportation. Food, primary metals, and transportation equipment were primary industries boosting activity.

Mining, oil and gas extraction grew 0.4% in February. Oil and gas extraction led the increase as Saskatchewan and Newfoundland and Labrador continued to boost output. Oilsands were down on synthetic crude facility maintenance. Mining was also up on expansion in copper, nickel, lead and zinc ore mining activity.

Services were weak in February with the public sector posting another month of decline. Arts, entertainment and recreation declined significantly coinciding with a two-week break in the NHL schedule before the winter Olympics.