Canadian economy ekes out 0.3 per cent growth in February

Canada's economy grew by 0.3 per cent in February, which doesn't sound like much but has economists optimistic the economy is strengthening.

"Finally there’s something to cheer about in the Canadian economy," said Avery Shenfeld, chief economist at CIBC World Markets.

Statistics Canada said Tuesday that February's growth was the same pace as in January, driven by oil and gas and mining activity which was up 2.2 per cent, the fifth straight monthly increase.

Excluding oil and gas, mining activity grew 6.4 per cent in February, due to a jump in output at potash mines in Saskatchewan, StatsCan said.

The return of professional hockey after a lengthy labour dispute helped the arts and entertainment sector grow by 3.3 per cent in February. That follows a 4-per-cent increase in January.

"While it probably won’t have a meaningful impact on overall growth, bar owners in Canada’s biggest cities are no doubt cheering the fact that four Canadian teams will attempt playoff runs this year (including four of Canada’s five biggest cities)," noted Robert Kavcic, senior economist at BMO Capital Markets.

On the flip side, hotel and restaurant activities were down 1.0 per cent in February, which StatsCan says is due to a decrease in the number of international travellers to Canada.

Manufacturing – an industry that has long been a worry for market forecasters – saw 0.8 per cent growth in February, following a 0.6 per cent rise in January.

"Overall, a ray of sunshine in an economy that needs all it can get," said CIBC's Shenfeld.

He said the figures help to put first-quarter growth on track for 2 per cent annualized growth in Canada.