Prior was +0.2%Q4 GDP was -0.6%Goods-producing industries expanded by 0.2% for the second month in a rowServices-producing industries were essentially unchanged in January 9 of the 20 industrial sectors recorded growth in January.Canada's economy closed out 2025 on shaky ground, and today's January monthly GDP release arrives at a moment of heightened uncertainty. Real GDP grew just 1.7% for the full year of 2025, the slowest annual pace since the pandemic-driven contraction of 2020, with lower exports to the United States acting as the primary drag. The fourth quarter proved particularly disappointing: output contracted 0.6% on an annualized basis, missing both the Bank of Canada's projection for a flat reading and the consensus call for a modest 0.2% decline. A massive inventory drawdown by manufacturers drove the headline miss, though underlying domestic demand held up better, expanding at a 2.4% quarterly pace.The monthly data offered a slightly more encouraging signal heading into year-end. GDP by industry rose 0.2% in December, edging past expectations, but an advance estimate pointed to flat growth in January — suggesting the economy entered 2026 with limited momentum. Early readings indicated that a brief pickup in manufacturing activity proved short-lived, with the sector contracting again to start the year.The broader backdrop remains complicated. Trade-related uncertainty weighed heavily on business investment throughout 2025, extending a decade of underinvestment that has contributed to Canada's lagging productivity growth. The Bank of Canada, having cut rates by a full percentage point through 2025, held its policy rate at 2.25% in January 2026 and appears firmly set at neutral, leaving limited room for stimulus absent a clear deterioration. Consumer spending has been a relative bright spot, supported by real wage gains and earlier rate relief, but slowing population growth and a softening housing market pose headwinds. Today's print will be closely watched for confirmation that the economy has stabilized — or for signs that the sluggish momentum carried into the new year is deepening. This article was written by Adam Button at investinglive.com.