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UPDATE 1-Canada's GDP edges up 0.1% in January despite reduced trade with China

OTTAWA, March 31 (Reuters) - Canada’s economy gained 0.1% in January, driven largely by higher manufacturing, Statistics Canada data showed on Tuesday, despite reduced trade with China and advisories against non-essential travel to the Asian superpower affecting potential growth.

The figure matched the 0.1% forecast by analysts in a Reuters poll and followed a 0.3% rise in December. Goods-producing industries posted a 0.2% rise, while the services sectors reported a 0.1% increase. Increases were reported in 12 of the 20 industrial sectors tracked by Statscan.

In a statement, Statistics Canada said the January figure should serve as a baseline of the Canadian economy for measuring the impact of the coronavirus outbreak on various industries in the coming months.

“In January, effects such as reduced trade with China and advisories against non-essential travel to China affected potential growth,” Statscan said in a release. “The pandemic will significantly affect economic activity in March and subsequent months.”

As of Tuesday morning, Canada had recorded 7,448 cases of COVID-19 and 89 deaths, according to public health data. Some 1.55 million Canadians filed for unemployment insurance between March 16 and March 25.

The Bank of Canada on Friday cuts its key overnight interest rate by 50 basis points for the third time this month to 0.25% from 0.75% as it moved to try to cushion the economy from the impact of the outbreak and low oil prices.

“These are not normal times,” RBC Senior Economist Josh Nye said in a note on Tuesday, adding that thousands of businesses have temporarily closed as officials try to mitigate the spread of the coronavirus in Canada.

“March’s GDP is likely to show a record decline - one that will stand until we get the April figures,” Nye said.

The Canadian dollar was trading at 1.4296, or 69.95 U.S cents, to the U.S. dollar after the data release.

Manufacturing rose 0.8% in January, Statistics Canada said, as both durable and nondurable manufacturing increased by 0.1% and 1.7% respectively.

These increases came despite partial shutdowns at some Canadian refineries for maintenance work, temporary shutdowns at some automotive assembly plants as well as the closure of a General Motors plant, which respectively resulted in lower output for petroleum, coal, and transportation equipment manufacturing, the agency said.

Reporting by Kelsey Johnson in Ottawa; editing by Jonathan Oatis