Economic output fell by 0.1 per cent in February: Statistics Canada

OTTAWA — Weakness in the mining sector and troubles for the transportation industry caused by winter weather and a train derailment weighed on the economy in February.

Statistics Canada said Tuesday that gross domestic product contracted 0.1 per cent in February, as both goods-producing and services-producing industries declined.

The pullback followed growth in January of 0.3 per cent.

Economists had expected no change in GDP for February, said Thomson Reuters Eikon.

“There apparently wasn’t much love for the Canadian economy in February, with GDP posting a surprising decline as adverse weather held back output,” CIBC economist Royce Mendes wrote in a report.

The central bank projected growth at an annualized rate of just 0.3 per cent in the first three months of 2019 compared with an earlier forecast for 0.8 per cent.

Statistics Canada said the mining, quarrying and oil and gas extraction sector fell 1.6 per cent overall, with mining and quarrying down 4.4 per cent and oil and gas extraction slipping 0.6 per cent.

Transportation and warehousing fell 1.6 per cent, due to a 10.8 per cent drop in rail transportation as cold weather, heavy snowfalls and a derailment in B.C. that closed an important rail line through the Canadian Rockies hurt the sector.

However, the cold weather helped boost the utilities sector, which gained 1.5 per cent in February, with higher demand for electric power generation, transmission and distribution, and natural gas distribution.

“The underlying economic signals remain generally healthy, with construction activity rising for a second month, and some modest signs of life in investment,” wrote TD Bank senior economist Brian DePratto.