Canada’s economy didn’t expand in February, as a slight uptick in the service sector was offset by a small decline in the goods-producing sector.
Statistics Canada reported Friday that the construction, real estate, finance and insurance sectors continued to expand, butÂ manufacturing, mining, quarrying, and oil and gas extraction all declined.
The total output of the economy in FebruaryÂ was about the same as the month before â€” on track for aÂ little over $1.7 trillion, on an annualized basis. While flat on a monthly basis, Canada’s economy was 2.5 per cent bigger in February thanÂ the same time last year.
The flat showing follows several months of strong growth, andÂ as such could beÂ sign that the Bank of Canada will be in no rush to raise interest rates, economists say.
“If momentum is waning, then combined with … ongoing trade policy uncertainty, it counsels a patient stance on monetary policy for a long time yet,” said Scotiabank’s Derek Holt.
TD Bank economist BrianÂ DePrattoÂ said despite the weak monthly showing, he expects the economy to perform decently well this year and set the stage for some modest rate hikes down the line.
“While this might worry some, the prior pace was unsustainable and some payback is reasonable,” BMO economist Benjamin Reitzes said of the February numbers. “The economy remains headed in the right direction. Now, we just have to hope that Canada-U.S. trade issues and/or mortgage market stress doesn’t derail the broader momentum.
“After the exciting growth figures of recent months, it was perhaps inevitable that the Canadian economy would take a slight breather,” ReitzesÂ said.