Canada economy unexpectedly shrinks in Feb, mining and rail transport weake

OTTAWA: The Canadian economy unexpectedly shrank by 0.1 percent in February, pulled down in part by weakness in the mining sector and bad weather that hurt rail transport, Statistics Canada data indicated on Tuesday.

Analysts in a Reuters poll had expected no change from January, when the economy grew by 0.3 percent.

The release will be closely analyzed by the Bank of Canada, which last week held interest rates steady but removed wording around the need for future hikes. The central bank says any future moves will be heavily data-dependent.

The mining, quarrying and oil and gas extraction sector fell by 1.6 percent, the sixth consecutive decline, as weaker international demand cut output of most kinds of metals. Potash and coal mining also posted drops.

Transportation and warehousing dipped by 1.6 percent, the largest decline since June 2011, on a 10.8 percent plunge in rail transportation. Cold weather and heavy snow and a derailment on a major line were to blame, Statscan said.