Canadian Monthly GDP (January 2026)

Canada's economy posts modest growth to start the year 

• Canadian GDP ticked higher by 0.1% month-on-month (m/m) in January slightly edging out Statistics Canada's advanced guidance and market expectations for a flat reading. 
• Compositionally, 9 of 20 industries registered an increase on the month. Goods industries rose for a second consecutive month (0.2% m/m), while the services sector recorded no growth.
• Oil and gas extraction (+1.6% m/m) and the construction sector (+1.1% m/m) pushed the overall goods sectors higher in January. This offset the contraction in the manufacturing sector, dragged lower by motor vehicles and parts manufacturing (-10.8% m/m). 
• On the services side, decreases in wholesale trade (-1.2% m/m), transportation and warehousing (-0.7% m/m) and real estate (-0.2% m/m) were offset by solid gains in retail trade (0.8% m/m) and finance and insurance (0.5% m/m).
• Advanced guidance calls for an acceleration in February's real GDP growth to 0.2% m/m, led by a manufacturing rebound and continuing strength in mining and finance and insurance.

Key Implications

• Canada's economy looks to be off to a slightly better-than-expected start in 2026 after a lackluster fourth quarter. With January's print and a flash estimate for February, Q1-2026 growth is tracking in-line with historical trend growth, a view shared by both us and the Bank of Canada. It's worth noting that quarterly expenditure-based GDP growth has been particularly volatile due to sharp movements in trade and inventories, something not well captured in the monthly industry GDP accounts.
• Today's data shouldn't impact the Bank of Canada's next policy decision on April 29th. Instead, the recent U.S.-Iran war is keeping the BoC more forward looking, with the economic outlook highly dependent on how long and severe the conflict becomes. The Bank will closely monitor this shock – weighing downside risks to growth against the upside inflationary impacts – and stand ready to respond. For now, we maintain our view that the BoC has reached the end of their interest rate easing cycle. 

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