Canada’s economy still showing modest growth to start 2024 – National | Globalnews.ca

The Canadian economy was off to a solid start in January, Statistics Canada data shows.

The agency said Thursday that real gross domestic product in the first month of the year rose 0.6 per cent from December.

Statistics Canada pointed to a rebound in education services, tied largely to the end of public sector strikes in Quebec, as driving the growth in January. The beginning of a strike by the Saskatchewan Teachers’ Federation in the month hindered growth to a degree, StatCan added.

The agency also said that an end to the Screen Actors Guild – American Federation of Television and Radio Artists (SAG-AFTRA) strike in November meant that film and TV production in Toronto and Vancouver picked back up in January, driving growth in this sector.

Canada’s real estate, rental and leasing sector grew for the third consecutive month. Higher sales in Ontario’s Golden Horseshoe area were responsible for the gains, StatCan said.

The manufacturing industry in January also fully offset declines seen in December, StatCan said. Output from the automotive sector snapped a four-month streak of declines as production resumed at some auto assembly plants at the start of the year.

Oil and gas extraction was down in January, tempering gains for the overall economy.

Initial estimates show real GDP is expected to have kept growing at a clip of 0.4 per cent monthly in February, though StatCan cautions that those early readings can be revised.

1:48Bank of Canada says it’s still ‘too early’ to cut interest rates

Economic growth has been slowing nationally amid higher interest rates from the Bank of Canada aimed at taming inflation. The country narrowly avoided falling into a technical recession in 2023, according to StatCan data.

The Bank of Canada is looking for signs growth is still cooling as it weighs whether or not interest rates need to remain elevated, but policymakers have also said they do not want to leave rates high for too long and risk a worse economic outcome.

The central bank’s next policy rate decision is set for April 10.

More to come.

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