OTTAWA, Ont. -- Canada's dollar dipped about half a cent in early trading Monday after Statistics Canada reported the national economy shrank in February rather than posting a gain as most economists expected.
Statistics Canada reported the national gross domestic product declined by 0.2 per cent from January. Economists had been expecting Canadian GDP would grow by 0.2 per cent in February.
Shortly after the announcement, the Canadian dollar was down 0.55 of a cent to 101.39 cents US. The loonie recovered some of the lost ground in later trading and was at 101.42 cents a few minutes before stock markets were to open.
"The result leaves the economy tracking well below the Bank of Canada's 2.5 per cent growth rate for the quarter,'' observed CIBC World Markets chief economist Avery Shenfeld.
"Even with a likely rebound in March, the first quarter growth rate looks likely to be no better than two per cent or less.''
Statistics Canada says temporary closures in mining and other goods-producing industries contributed to February's decline from January.
In service industries, gains in wholesale trade and in the finance and insurance sector outweighed declines in retail trade and in the transportation and warehousing sector.
Mining and oil and gas, combined, fell 1.6 per cent in February following a small drop in January and a 2.0 per cent increase in December.
With oil and gas excluded, mining declined 7.0 per cent in February, as output at potash and nickel mines was reduced by temporary shutdowns.
Oil and gas extraction decreased 0.9 per cent. Crude petroleum production declined partly as a result of unplanned maintenance activities in Alberta. Natural gas production also fell.
Manufacturing declined 1.2 per cent in February after increasing for five consecutive months. Non-durable goods manufacturing dropped 1.4 per cent with reduced output of food, chemical, and plastic and rubber products.
Durable goods production fell 0.9 per cent as lower output in transportation equipment and primary metal manufacturing more than offset increases in non-metallic mineral products and machinery manufacturing.
Unusually warm weather meant lower demand for electricity and natural gas, pushing the output of utilities down 1.9 per cent.
Construction rose 0.5 per cent in February with increases in residential and non-residential building.
While the wholesale trade rose 1.5 per cent -- a third consecutive monthly increase -- the retail trade was down 0.4 per cent. It was the second consecutive drop in retail.
New car dealers, who had a notable sales increase in January, saw sales slip last month.
Excluding new car dealers, retail trade edged down 0.1 per cent with lower sales at food and beverage stores, health and personal care stores as well as electronics and appliance stores.
Those drops outweighed increases at building materials stores, clothing stores and general merchandise stores.
The public sector, education, health and public administration combined, was unchanged in February as gains in health services were offset by decreases in education services and public administration.