OTTAWA, Ont. – The economy surged ahead in January, expanding 0.4 per cent after two months of sluggish growth, but Statistics Canada says transportation and warehousing were not able to keep pace.

Transportation and warehousing showed only 0.2 per cent growth for the month. Truck and rail transportation were hampered by the weather in what turned out to be the coldest January in nearly a decade with also heavy snowfall.

Both the rail and the truck transportation industries posted lower output levels in January.

“Firms in the rail industry reported that the frigid weather caused their trains to run slower, forcing them to use fewer train cars but more locomotives. Winter storms also caused disruption to schedules for both the rail and trucking industries,” Statistics Canada notes.

A more positive sign for the transportation and warehousing industries is that the January figures do show a 3.8 per cent gain over the same period the previous year.

In contrast the economy overall grew by 3.4 per cent this January compared to January 2002.

The 0.4 per cent gain in GDP for the Canadian economy was the sixteenth consecutive monthly increase.

Industrial production (mining, utilities and manufacturing sectors) increased by a substantial 0.9 per cent, after declining in the previous two months.

All three components reported significant jumps in output. Comparable US statistics on industrial production showed a 0.8 per cent increase; however, in the U.S., higher manufacturing and utilities output was offset somewhat by lower output in its mining sector.

Motor vehicle manufacturers ramped up production levels 6.2 per cent, after a four-month retrenchment when manufacturers cut back production to cope with ballooning inventories.

Nevertheless, although most plants hiked output in January, some continued to curb production for further inventory control.

Production levels in January remained 13.3 per cent below the peak reached in August, 2002.

North American motor vehicle sales dropped sharply in January, following huge gains in December.