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The Bank of Canada was likely to maintain its dovish stance in view of the disappointing growth figures. Economists expect the bank to keep rates the same until 2018, though some see a possibility the bank will have to cut again.

The central bank cut rates twice in 2015 to stave off the impact from lower oil, a major export for Canada.

“I think the Bank of Canada continues to highlight that there is quite a bit of slack still remaining in the economy,” said Nick Exarhos, an economist at CIBC Capital Markets.

“The uneven pace of the Canadian economic recovery after the oil shock gives them reason to continue on with their dovish message.”

The Canadian dollar weakened to a five-week low against the greenback following the data.

Output in the manufacturing sector fell by 2.0 per cent, the largest decline since December 2013, on a lower volume of exports. Both durable and non-durable manufacturing were down.

Oil and gas extraction was down 2.5 per cent, pulling back after four months of gains. The support sector for the petroleum and mining industry rose 4.4 per cent on stronger drilling activity, but it was still well below levels in early 2015 as the oil price shock began to pinch.

Weaker construction also weighed on the economy with the sector down 0.5 per cent, its fifth decline in six months. Residential construction fell 1.0 per cent as builders broke ground on fewer homes.

The service sectors fared better, rising 0.1 per cent on the whole on an increase in retail and wholesale trade.

© Thomson Reuters 2016