Wednesday, April 30, 2008

Gross domestic product by industry

Economic activity declined 0.2% in February, continuing at a much lower pace than in the first half of 2007. Wholesale trade and manufacturing accounted for most of the decrease.

Other notable declines were recorded in retail trade, oil and gas extraction and exploration as well as in the transportation and financial sectors.

Advances in the tourism and government-related industries and in construction were not enough to offset these declines.

Wholesaling activity retreats

Wholesaling activity decreased 1.4% in February after advancing rapidly in January. Despite some large fluctuations in recent months, this sector has shown an upward trend. Although the declines in February were widespread, those most affected were wholesalers of motor vehicles and of building supplies.

Note to readers The monthly gross domestic product (GDP) by industry data are chained volume estimates with 2002 as their reference year. This means that the estimates for each industry and aggregate are obtained from a chained volume index multiplied by the industry's value added in 2002. For the 1997 to 2004 period, the monthly estimates are benchmarked to annually chained Fisher volume indexes of GDP obtained from the constant-price input-output tables. For the period starting with January 2005, the estimates are derived by chaining a fixed-weight Laspeyres volume index to the prior period. The fixed weights are the industry output and input prices of 2004. This makes the monthly GDP by industry estimates more comparable with the expenditure-based GDP data, chained quarterly. Revisions With this release of monthly GDP by industry, revisions have been made back to January 2007. For more information about monthly GDP by industry, see the National Economic Accounts module on our website (www.statcan.ca/nea).

Manufacturers cut back

Manufacturing value added fell 0.7% in February, with the durable and non-durable goods accounting almost equally for the decline. In all, 16 out of the 21 major groups decreased. Significant declines were recorded by wood product, and petroleum and coal product manufacturers.

Output of wood products has been trending down since January 2006, reflecting mainly the drop in sawmill activity. Exports of lumber, notably to the United States, have decreased considerably since the beginning of the housing slump there. With the lower demand, prices have started to decline, and several mills temporarily shut down or cut back production.

Some petroleum refineries in the West were subject to unscheduled maintenance shutdowns in February, resulting in a 5.1% drop in production.

Manufacturing of transportation equipment advanced 2.1% in February, led by a hefty gain in the production of motor vehicles. After a major cutback in December related to both retooling and inventory control, the manufacturing of motor vehicles increased by about 8% for the second month in a row in February, and has now regained slightly more than half of its December tumble. Sales of motor vehicles in the United States, where most of the Canadian production is destined, remained sluggish.

Preliminary information for March indicates a substantial decline in motor vehicle assembly in Canada, mainly due to a major labour dispute at a supplier of parts located outside the country.

While sales of aerospace manufacturers increased significantly in February, as reported in the Monthly Survey of Manufacturing, the corresponding production occurred over many months.

Energy sector loses steam

The energy sector fell 0.9% in February. The oil and gas extraction industry contracted 0.7%, dragged down by a decrease in natural gas extraction, while exports and storage of natural gas declined. The production of petroleum increased while the price of oil reached record high levels. Furthermore, exports of crude oil were up substantially.

The output of the mining sector excluding oil and gas edged up 0.1% in February. The decline recorded by the non-metal mines was offset by the gain posted by the metal ore mines. Support activities for mining and oil and gas extraction contracted 1.4%.

Retailing activity slips

Value added in the retail trade sector fell 0.6% in February. Like wholesaling, the declines were widespread. Lower volume of activity at pharmacies, clothing stores, and new and used car dealers, was behind the decline. Despite a lower Goods and Services Tax rate and incentives for new vehicle buyers, the inclement weather in several parts of the country may have deterred consumers in February.

Slight growth in construction

Construction activity increased 0.2% in February, a slightly faster pace than in January. All types of construction projects moved forward in February. A significant increase in apartment construction propelled residential construction.

The home resale market fell considerably in February. More than half of this decrease came from Ontario where inclement weather may have played a role.

Other industries

Activities in the finance and insurance sector dipped 0.2%, as the volume of transactions on the stock exchanges decreased.

Transportation declined as lower activities in manufacturing and in wholesale and retail trade led to a decline in truck transportation, while lower extraction of natural gas affected pipeline transportation.

Available on CANSIM: table 379-0027.

Definitions, data sources and methods: survey number 1301.

The February 2008 issue of Gross Domestic Product by Industry, Vol. 22, no. 2 (15-001-XWE, free) is now available from the Publications module of our website.

Data on gross domestic product by industry for March will be released on May 30.

For general information or to order data, contact our dissemination agent (613-951-4623 in Ottawa or toll-free 1-800-887-4623; IAD-Info-DCI@statcan.ca). To enquire about the concepts, methods or data quality of this release, contact Bernard Lefrançois (613-951-3622), Industry Accounts Division.

Monthly gross domestic product by industry at basic prices in chained (2002) dollars
	September 2007r	October 2007r	November 2007r	December 2007r	January 2008r	February 2008p	February 2008	February 2007 to February 2008
	Seasonally adjusted
	month-to-month % change						$ millions¹	% change
All Industries	-0.0	0.3	0.1	-0.7	0.6	-0.2	1,231,528	1.5
Goods-producing industries	-0.5	0.2	-0.3	-1.8	0.7	-0.4	372,315	-2.0
Agriculture, forestry, fishing and hunting	-0.3	-0.4	-0.4	-0.9	-0.5	-0.5	26,062	-5.5
Mining and oil and gas extraction	-1.1	-1.5	-0.2	-1.3	0.8	-0.6	57,113	-3.1
Utilities	1.8	1.1	0.4	-0.6	-0.6	-0.1	31,384	1.4
Construction	0.5	0.2	0.2	-0.1	0.1	0.2	78,363	2.7
Manufacturing	-1.1	0.9	-0.6	-3.2	1.4	-0.7	179,162	-3.6
Services-producing industries	0.2	0.4	0.2	-0.1	0.5	-0.1	860,444	3.2
Wholesale trade	0.7	1.5	0.1	-1.8	2.6	-1.4	73,279	5.7
Retail trade	-0.2	0.4	0.7	0.1	1.3	-0.6	74,911	5.8
Transportation and warehousing	-0.2	-0.2	0.3	-1.2	0.7	-0.5	56,348	0.9
Information and cultural industries	0.2	0.4	0.1	0.2	-0.3	0.3	44,723	2.0
Finance, insurance and real estate	0.1	0.4	0.3	0.2	0.3	-0.0	244,334	3.1
Professional, scientific and technical services	0.1	0.0	0.4	0.0	0.2	0.1	58,081	2.6
Administrative and waste management services	0.3	0.3	0.4	0.3	0.2	0.2	32,389	3.7
Education services	0.4	0.2	0.2	0.2	-0.1	0.1	58,320	2.4
Health care and social assistance	0.1	0.2	0.1	0.3	0.0	0.0	77,625	2.2
Arts, entertainment and recreation	0.5	-0.6	1.0	-2.7	1.9	0.4	11,834	2.4
Accommodation and food services	1.0	-0.7	-0.6	-0.1	1.3	0.6	28,297	4.1
Other services (except public administration)	0.3	0.4	0.1	0.3	0.2	0.2	31,462	3.0
Public administration	0.1	0.4	0.2	0.2	0.1	0.2	68,911	2.5
Other aggregations
Industrial production	-0.8	0.2	-0.4	-2.4	1.0	-0.6	268,746	-2.9
Non-durable manufacturing industries	-1.5	-0.4	0.4	-1.1	0.0	-0.7	70,488	-2.9
Durable manufacturing industries	-0.8	1.7	-1.3	-4.6	2.3	-0.6	108,874	-4.1
Business sector industries	-0.1	0.3	0.1	-0.8	0.7	-0.3	1,036,369	1.4
Non-business sector industries	0.2	0.3	0.1	0.2	0.1	0.1	195,089	2.2
Information and communication technologies industries	-0.2	0.8	0.0	0.1	0.6	-0.0	57,772	3.1
Energy sector	-0.2	-0.7	0.1	-1.3	1.0	-0.9	86,038	-2.2
r revised p preliminary 1. Millions of chained (2002) dollars, seasonally adjusted at annual rates.