08:52 AM EDT, 03/28/2025 (MT Newswires) -- Front-running of United States tariffs boosted Canadian gross domestic product in January, but the economy appears to have stalled again in February, said CIBC.

Friday's 0.4% month-over-month advance in January was a tick better than consensus expectations and the advance estimate, and followed an upwardly revised 0.3% gain in the prior month as well, noted the bank.

Goods-producing industries accounted for most of the growth in January, including strong gains in mining, oil & natural gas and manufacturing. Activity in service sectors edged up by only 0.1% month-over-month, held back by a dip in retailing following strong growth in the prior month.

The advance figure for February pointed to a stall in activity, although this was likely more a reflection of worse than normal winter weather during the month and the ending of the GST holiday rather than trade uncertainties, stated CIBC.

Indeed, Statistics Canada noted that manufacturing activity continued to rise in February, while real estate and retailing saw declines.

The bank expects that U.S. tariffs will have a clearer negative impact on GDP in March and during Q2.

For Q1 as a whole, growth is tracking in line with the 2% forecast by the Bank of Canada back in its January Monetary Policy Report, although following much stronger than expected growth during the second half of 2024, added CIBC.

However, given recent developments on the tariff front, this is now old news, and the BoC will be "carefully" judging downside risks to growth against a stronger near-term profile for inflation as it makes its next policy decisions, according to the bank.