Canada economic activity eased in February as goods sectors fell

People work at a building under construction in Toronto February 20, 2014. Picture taken February 20. REUTERS/Aaron Harris

OTTAWA (Reuters) - The Canadian economy stalled in February after a strong start to the year, as activity in the manufacturing and natural resource sectors declined, data from Statistics Canada showed on Friday, suggesting that low oil prices continue to impede growth. Gross domestic product fell 0.1 percent in the month, as expected, after increasing for four months in a row. While economists had expected to see some give-back from January's unrevised 0.6 percent gain, they still expect relatively strong growth for the first quarter overall. The persistent impact of cheap oil was reflected by February's 0.8 percent drop in the mining, quarrying and oil and gas extraction sector. Support activities for the industry retreated, while extraction of non-conventional oil dropped. Activity in the manufacturing sector also pulled back after three strong months. Overall, activity in goods producing industries dropped by 0.6 percent. While growth in services was flat, the retail sector was a bright spot, up 1.4 percent. But wholesale trade tumbled 1.8 percent, potentially foreboding weak business investment, as wholesalers sold less machinery, equipment and supplies. The plunge in oil prices since mid-2014 put Canada in a mild recession last year, forcing the central bank to cut interest rates twice. (Reporting by Leah Schnurr; Editing by Steve Orlofsky)