OTTAWA (Reuters) — The Canadian economy stalled in February as a pickup in the retail sector was offset by a decline in manufacturing and a steep drop in support activities for the mining and energy sector, data from Statistics Canada showed on Thursday.
Gross domestic product was unchanged in the second month of the year, though that topped economists' expectations for a decline of 0.1 per cent. January was revised down to a decline of 0.2 per cent.
Economists are watching to see how the economy is coping with the drop in the price of oil, a major export for Canada. The Bank of Canada expects the first quarter will see no growth, with the impact of cheap crude likely to be front-loaded to the beginning of the year.
Although oil and gas extraction edged up 0.1 per cent in February, support activities for the mining and energy sector tumbled 15.4 per cent on a drop in rigging and drilling services. It was the biggest decline since March 2009.
Manufacturing activity fell 0.8 per cent, driven lower by a decrease in durable goods manufacturing. Overall, the goods producing sector declined 0.2 per cent.
The service sector fared better, rising 0.1 per cent. Retail trade climbed 1.5 per cent for its first increase in three months. Gains in the industry were broad, including an increase in sales at merchandise stores and at motor vehicle and parts dealers.