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Oil Sands Drive Growth in Canada’s January Economic Expansion
Canada’s economy continued to show strength in January, driven largely by the energy sector, with the oil sands leading the way. A new report by Stats Canada shows real GDP rose 0.4%, following a 0.3% increase in December. Resource industries, including mining, quarrying, and oil and gas extraction, accounted for much of the growth.
The mining, quarrying, and oil and gas extraction sectors grew by 1.8% in January, marking their second consecutive month of growth. Within this sector, oil and gas extraction saw the largest increase, up 2.6%, with oil sands posting the largest gain with a 3.6%. This is the fourth increase in six months for oil sands, driven by a boost in synthetic crude production in Alberta.
According to Statistics Canada, oil sands extraction continues to be a critical driver for Canada’s economic performance. The ongoing production growth, coupled with higher oil prices, are demonstrating the energy sector’s importance to the national economy.
Conventional oil and gas operations also contributed, rising 1.5% in January, spurred by an increase in natural gas extraction, which also saw higher exports and greater domestic deliveries.
Support industries for mining, oil and gas extraction sectors rose 1.0%, largely due to a rebound in drilling activity after declines in the prior months. This offset weaker performance in rigging services, helping sustain momentum in the sector.
Despite the January growth, preliminary data for February suggests a flattening of expansion, with early estimates indicating declines in oil and gas extraction and retail trade, offset by gains in manufacturing and financial services. Final data for February will be released on April 30.
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