Canada’s economy expanded by 1.1 per cent in February, its fastest pace in a year, as businesses bounced back from previous lockdowns and restrictions put in place to deal with the Omicron variant of COVID-19.
Statistics Canada reported Friday that almost three-quarters of the sectors it tracks saw output increase.
Preliminary data for March suggests Canada’s gross domestic product grew by another 0.5 per cent, the data agency said.
The service sector, which had been walloped by a series of lockdowns related to the emergence of Omicron in December and January, bounced back in February with an expansion of 0.9 per cent.
The accommodation and food services sector soared by 15.1 per cent. The arts, entertainment and recreation sector added 8.4 per cent for the month, while rail transport expanded by 9.1 per cent and air transport grew by 7.7 per cent.
Goods-producing industries also got in on the action, expanding by even more than the service sector, up 1.5 per cent during the month. The mining, quarrying and oil and gas sector grew by 3.4 per cent.
Coming off the lows of January, economists were expecting the economy to grow by about 0.8 per cent, but the GDP figure beat those expectations.
Tabulating the data for the three months of January, February and March together puts the economy on track to expand by 5.6 per cent in the first quarter, almost twice the three per cent expansion the Bank of Canada is expecting, Desjardins economist Royce Mendes said.
The numbers make a rate hike by the central bank to cool things down even more likely, he said.
“The Bank of Canada has set the table for a 50-point hike in June, but data like this will have markets pricing in at least some chance that central bankers need to move more aggressively,” Mendes said.
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