Canada's Economy Returns to Growth, Though Activity Cools in March — 2nd Update
Canada's economy grew at an annualized pace of 1.7% in the first quarter, after shrinking slightly in the final quarter of 2025. The growth was driven by goods-producing industries, with manufacturing recording its strongest monthly growth since January 2023.
Canada's economy rebounded in the first quarter, with industry-level gross domestic product rising 0.2% in February. Statistics Canada's advance data indicates output was unchanged in March. The Canadian economy expanded at an annualized pace of 1.7% in the first quarter, slightly stronger than the Bank of Canada's expectations. Goods-producing industries led the growth, with manufacturing recording its strongest monthly growth since January 2023. The public sector, however, dragged on overall activity, with broad-based declines. The Bank of Canada forecast growth of 1.5% annualized in both the first and second quarters and 1.2% over the course of the year.
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