Gross domestic product increased 0.6 percent from December, the fifth straight gain and the biggest since December 2006, Statistics Canada said.
The report suggests first-quarter economic growth is still coming in faster than the Bank of Canada predicted, after output expanded at the highest quarterly rate since 2000 in the October-December period. Investors have raised bets that Governor Mark Carney will increase his key interest rate in the next few months on signs of quicker inflation and growth.
Manufacturing rose 1.9 percent on gains in metals, chemicals, plastics and rubber products. Wholesaling rose 2.9 percent and construction rose 1.7 percent, Statistics Canada said.
The central bank predicted the economy will grow at a 3.5 percent pace this quarter and a 4.3 percent rate in the April- June period before slowing through next year.
Canada’s 5 percent growth in the fourth quarter exceeded the Bank of Canada’s 3.3 percent estimate.
Today’s report showed mining and oil and gas extraction rose 0.9 percent in January, and increased stock market trading led a 0.6 percent increase in the finance and insurance industries.
Gross domestic product was 1.3 percent greater in January than in the same month a year ago. The country’s first recession since 1992 ended in the third quarter of last year.