Economy grew by 0.6% in January, beats economists’ expectations

The Canadian economy topped expectations in January with its best month in nearly five years, the fourth consecutive monthly increase.

Real gross domestic product rose 0.6 per cent in the first month of the year, boosted by manufacturing, retail trade and the oil and gas sector, Statistics Canada reported Thursday.

Economists had expected growth of 0.3 per cent in January, following a 0.2 per cent increase for December, according to Thomson Reuters.

TD Bank economist Brian DePratto called the January GDP report “the most encouraging in recent memory.”

“Strength was broad-based, with nearly all major industries growing in January,” DePratto wrote in a commentary.

“Indeed, many strong monthly growth figures in recent history were the result of one-off factors, or snap-backs following contractions. In contrast, January’s strong performance follows three prior months of expansion, with special factors playing a smaller role.”

Statistics Canada said the output of goods-producing industries increased 1.2 per cent in January as the manufacturing sector grew by 1.9 per cent in the month.

Mining, quarrying, and oil and gas extraction rose 0.9 per cent in January as increases in oil and gas extraction as well as support activities for the mining and energy sector more than offset a drop in mining and quarrying.

Meanwhile, service-producing industries rose 0.4 per cent as retail trade grew by 1.5 per cent, helping offset a 0.2 per cent drop in wholesale trade.

The finance and insurance sector grew by 0.6 per cent in January, while the public sector increased by 0.2 per cent.