GrowthNow for March 2026
A Real-Time Forecast of Canada’s Economic Growth
Signs of stabilization emerge amid downside risks
Canada’s real GDP was flat in the first quarter of 2026, following a 0.2 per cent contraction in the previous quarter. The first-quarter GDP results depicted an economy that was largely stagnant, with limited growth momentum.
June 25, 2026 • 8-min read
About the Series
Nowcasting refers to the practice of using current or recent economic data to estimate the GDP growth rate for the current quarter before official figures are published. This provides a more up-to-date understanding of economic conditions and trends, as there usually is a significant time lag between official GDP data releases.
We aim to equip policy-makers and senior executives across Canada with the essential insights they need to make well-informed decisions in a rapidly changing economic environment. This monthly report enables policymakers to respond promptly and implement measures effectively, thereby bolstering the efficacy of economic policies to foster sustainable economic growth and prosperity.
The GrowthNow has been produced since September 2023.
Methodology
We use a mixed data sampling (MIDAS) regression model—introduced by Ghysels, Santa-Clara, and Valkanov—intended to forecast Canadian real GDP growth. This approach enables us to model low-frequency variables as a function of high-frequency variables and their lagged terms.
On the release of national accounts data for the previous quarter, we begin nowcasting GDP growth for the current quarter. We will update our nowcast estimates each time there is a major data release for the variables included in our model.
We use monthly frequency variables that include GDP at basic prices, retail sales, manufacturing sales, inventories, employment, the national trade balance, consumer confidence, and commodity prices. We incorporate only one quarterly variable: GDP at market prices, lagged by one quarter.
Whenever we update the model to account for new data, this may entail removing some high-frequency variables and their lagged terms from the model, depending on which combination of variables produces the lowest Akaike information criterion.
All nominal variables are adjusted for inflation before we calculate the one-period percentage change. We use growth rates for all variables and their lagged terms as inputs. Our approach does not provide a breakdown of the components of GDP; rather, the model produces an estimate of GDP growth for the current period.
Our nowcast estimates will likely change as we incorporate updated or revised data for the indicators included in our model. We are also continuously looking to improve our nowcast results, which may prompt us to revisit our model approach in the future.
The nowcast results are published monthly.
Model Performance
The results of our nowcast model for 2025Q1 are displayed in this section.
Our model produced an initial estimate of 0.19 per cent on February 28, 2025. As seen in Chart 1, our nowcast estimate fluctuated between March and May but trended upward, eventually settling at 0.44 per cent on May 23. The official GDP figures were released on May 30, with quarterly GDP growth coming in at around 0.5 per cent.
Despite the discrepancy between our nowcasts for 2025Q1 and the actual figure, our regressions are relatively accurate. Recent regressions (Chart 2) have yielded an average forecast error of around 0.15 per cent.
We have also back-tested our model to assess its robustness. In the last four quarters, the average forecast error was 0.2 per cent.
Disclaimer: Forecasts and research often involve numerous assumptions and data sources and are subject to inherent risks and uncertainties. This information is not intended as specific investment, accounting, legal, or tax advice.
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Questions?
If you have any questions about the GrowthNow, or about becoming a subscriber, please contact us.