The Canadian economy saw modest growth in early 2022, despite Omicron


The Canadian economy managed to experience a slight expansion to kick off 2022, as goods-producing industries continued to generate growth even as most service sectors grappled with the Omicron variant of the coronavirus.

Statistics Canada said the country’s gross domestic product rose 0.2% in January. It was the eighth consecutive increase, after the data agency revised December data to a tiny 0.1% increase, from the previous stagnation.

Output in the goods-producing industries rose 0.8% during the month, led by construction. The services sector, meanwhile, has been hit hard by shutdowns and capacity restrictions related to limiting the spread of COVID-19.

Companies in the food, accommodation, arts, entertainment and recreation sectors saw their economic activity decline by 10% or more in January as people stayed home.

While these types of in-person services have borne the brunt of the economic crisis since the pandemic began, the good news is that they appear to have rebounded in February and beyond.

Preliminary data suggests the economy grew 0.8% this month, driven by increases in manufacturing, mining, quarrying, oil and gas extraction, accommodation and catering services, and construction.

“Despite the Omicron wave, the Canadian economy was able to keep its foot on the accelerator in January. And, in February, it was again time to step on the accelerator,” said economist Royce Mendes of Desjardins about the numbers.