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On the plus side, Statistics Canada revised up its estimate for December GDP growth to 0.2 per cent from 0.1 per cent initially.

The monthly GDP decline was the largest since May 2016, driven by a 3.6 per cent drop in oil and gas extraction. Statistics Canada cited a 7.1 reduction in oil sands production due to unscheduled maintenance shutdowns.

Another drag on January output was falling real estate activity as new mortgage qualification rules kicked in. Real estate agents and brokers saw their production drop 13 per cent in January, the largest monthly decline since November 2008 for the industry, as home sales slumped.

Many homebuyers rushed to buy homes at the end of 2017 to get ahead of the rules, which had the effect of inflating transaction numbers for December but reducing them for January.

Other Highlights of January GDP Report

• Lower oil production brought down activity for goods- producing sectors by 0.4 per cent

• While services production was little changed in January, that marked the worst performance for the aggregate in more than a year

• Mining excluding oil was down for a fourth month, dropping 0.8 per cent

• Manufacturing was one positive during the month, posting a 0.7 per cent gain for its third increase in four months

• Construction posted a 0.5 per cent gain, as builders continued to ramp up home construction even with a slowdown in real estate transactions

• Other gainers in January were wholesale and retail trade

Bloomberg.com