OTTAWA, March 31 (Reuters) - Canada's economy eked out a modest gain in January, with monthly gross domestic product rising slightly as strength in most goods-producing industries offset lingering manufacturing weakness, data showed on Tuesday.
The GDP in January rose by 0.1% on a monthly basis, following a 0.2% gain in December, Statistics Canada said, pointing to a fragile start to the year.
An advance estimate, which is usually prone to change, showed that the economy might expand by 0.2% in February.
Analysts polled by Reuters had forecast no growth in January.
Canada's economy has struggled in the wake of tariffs imposed by President Donald Trump on a range of sectors such as steel, automotive, aluminum, lumber, copper products etc. This has broadly hit Canada's manufacturing output.
While exemptions under the United States-Mexico-Canada free trade deal has helped other sectors, growth has been largely muted with the economy contracting in the fourth quarter.
Goods-producing industries, which accounts for one-fourth of the GDP, grew by 0.2% in January, following a similar increase in the previous month.
Mining, quarrying and oil and gas extraction and construction were the biggest drivers of growth which helped offset a 1.4% drop in manufacturing growth in January, StatsCan said.
The construction sector expanded for the third time in a row in January. The drop in manufacturing, which is the second-biggest contributor to monthly GDP, wiped off all the growth seen in December.
The services industries, such as real estate, finance, and healthcare, are the biggest contributors to Canadian economy and the growth in this category stalled in January, the statistics agency said.
Wholesale trade, transportation and real estate sectors shrank in January, offsetting growth seen in some major economic contributors such as retail trade, finance and insurance, and educational services.
Overall, nine of the 20 industrial sectors recorded growth in January, StatsCan said.
Economists have said that growth could take a bigger hit in the coming months as the impact of high crude oil prices due to the Iran war curtails consumer spending and spikes inflation.
It could also force the Bank of Canada to hike interest rates at a time of economic weakness.
Reporting by Promit Mukherjee
