Canada’s economy is showing signs of recovery! January’s GDP likely grew by 0.2%, following a similar increase in December. While not a huge jump, it’s a positive trend after two years of underperformance compared to global peers.

Key contributors to growth:

• The transportation sector rebounded after postal and port disruptions ended.
• Alberta’s non-conventional oil production surged 4% after a 2% rise in December.
• Wholesale sales volumes increased by 0.8%.

Challenges remain:

• Retail sales dropped 1.1% in January.
• Home resales fell 3.3%, following a 5% decline in December.
• Manufacturing output remained stagnant.

Despite these mixed results, GDP growth has outpaced population growth for two months straight, alongside lower unemployment.

What’s next?

International trade risks are a major concern. The U.S. has increased tariffs on Canadian imports by 25 percentage points, and more may be coming in April. This uncertainty could impact consumer and business confidence in the months ahead.