Canada GDP Edged Down 0.1% in January

Canada’s GDP was down 0.1$ in January while posting the largest decline in mining, quarrying, and oil and gas extraction since May 2016.

canada gdp jan 20181a

Canada’s GDP was down 0.1% in January while posting the largest decline in mining, quarrying, and oil and gas extraction since May 2016.

The output of goods-producing industries fell 0.4% in January, mainly on lower non-conventional oil extraction. There were increases in the manufacturing and construction sectors.

The output of services-producing industries was essentially unchanged in January, as a decline in real estate and rental and leasing was offset by increases in the wholesale, retail, and finance and insurance sectors. This was the weakest monthly growth for services-producing industries in more than a year.

The largest decline in mining, quarrying, and oil and gas extraction since May 2016

Following two months of growth, mining, quarrying, and oil and gas extraction declined 2.7% in January, its largest decline since May 2016.

canada gdp jan 2018a

Chart: Mining, quarrying, and oil and gas extraction

Oil and gas extraction declined 3.6% in January following two months of growth. Unscheduled maintenance shutdowns at some facilities contributed to a 7.1% drop in non-conventional oil extraction. Conventional oil and gas extraction was down for the third consecutive month, contracting 0.5% on lower crude petroleum and natural gas extraction.

Mining excluding oil and gas extraction was down for the fourth month in a row, declining 0.8% in January. Metal ore mining declined 2.2%, as all industries were down with the exception of other metal ore mining. Non-metallic mineral mining was up 0.9% following four months of decline, as growth in all other industries more than offset a 1.6% decline in potash mining. Coal mining was up 0.6%.

After eight monthly declines, support activities for mining and oil and gas extraction grew 2.5% as a result of an increase in rigging services.

Real estate and rental and leasing declines in January

Real estate and rental and leasing declined 0.5% in January following six consecutive months of growth.

The output of offices of real estate agents and brokers fell 12.8% in January, its largest monthly decline since November 2008. This more than offset the increases of the previous five months. Home resale activity was down in most Canadian markets, as new mortgage lending rules, including stress-testing for uninsured mortgages, announced in October 2017 took effect in January 2018.

Lower activity in real estate contributed to the professional, scientific and technical services sector edging down 0.1% as legal, accounting and related services contracted 1.9%.

Manufacturing resumes growth following December decline

Manufacturing was up 0.7% in January, the third increase in four months after having declined in December. The January gain came from a 1.6% increase in non-durable manufacturing, while durable manufacturing was essentially unchanged.

The growth in non-durable manufacturing was mainly the result of a 4.3% rise in the chemical manufacturing subsector. There were increases in the output of the pharmaceutical and medicine (+10.1%), pesticide, fertilizer and other agricultural chemical (+12.0%) and resin, synthetic rubber, and artificial and synthetic fibres and filaments manufacturing (+3.5%) industries. Food (+1.2%) and beverage and tobacco manufacturing (+5.0%) were also up, while petroleum and coal products manufacturing (-0.6%) declined for a third consecutive month.

Durable manufacturing was essentially unchanged in January, after decreasing 0.2% in December, as 4 of 10 subsectors contracted in January. There were declines in wood products (-4.0%), machinery (-1.9%) and non-metallic mineral products manufacturing (-5.0%), while fabricated metals (+2.6%), miscellaneous (+7.6%) and computer and electronic products manufacturing (+4.2%) increased. Transportation equipment declined for the third time in four months, contracting 0.7% in January as motor vehicle manufacturing was down 6.5% on account of atypical shutdowns at some assembly plants.

Wholesale and retail trade up

Wholesale trade was up 0.5% in January as six of nine subsectors grew, more than offsetting the decline in December. Machinery, equipment and supplies (+3.0%) led the growth, mainly on the strength of the other machinery, equipment and supplies industry. Food, beverage and tobacco wholesaling was up 2.8% as food and beverage products wholesaling increased. Offsetting some of the growth was a 3.7% decline in building material and supplies wholesaling. Farm products wholesaling declined 5.7% as activity at oilseeds and grain dealers contracted.

Retail trade was up 0.2% with its 12 subsectors evenly split between increases and decreases. Retailers that posted the largest increases in activity in January, such as general merchandise (+2.1%), clothing and clothing accessories (+2.1%) and electronics and appliance stores (+4.0%), had registered declines in December. Activity in building material and garden equipment and supplies stores (-1.8%) declined for the third consecutive month. Activity in gasoline stations fell 1.7% after three months of increases. Motor vehicle and parts dealers’ output was down 0.7% as activity at new and used car dealers contracted.

Construction increases

Activity in the construction sector was up 0.5% in January, with increases in the majority of subsectors. Residential construction rose 0.9%, as double, row and apartment-type dwellings construction grew along with home alterations and improvements. Non-residential construction was up 0.6%, rising for the eighth month in a row, led by industrial, public and commercial construction.

With a 0.9% gain in January, repair construction continued its sequence of alternating increases and declines since the second half of 2017. Engineering and other construction activities edged down 0.1%.

Other industries

Transportation and warehousing contracted 0.2% in January after two months of growth, as five of nine subsectors declined. This contraction mainly reflected a 3.2% decline in rail transportation, as rail movement of petroleum and chemicals, metals and minerals and forest products declined. Pipeline transportation declined 0.5%, as the 3.4% growth in pipeline transportation of natural gas was more than offset by a 4.3% decline in crude oil and other pipeline transportation. There was increased activity from urban transit systems and air transportation.

The finance and insurance sector grew 0.3% in January. Financial investment services, funds and other financial vehicles were up 1.2%, as financial market activity increased. Insurance carriers and related activities grew 0.6%, while depository credit intermediation and monetary authorities were essentially unchanged.

The public sector edged up 0.1% in January, as education and healthcare and social assistance increased, while public administration edged down.

Utilities edged down 0.1% as electric power generation, transmission and distribution declined 0.2%, while natural gas distribution rose 0.2%.

Accommodation and food services edged up 0.1%. Accommodation services grew 0.5%. Food services and drinking places were essentially unchanged.

Agriculture, forestry, fishing and hunting decreased 0.7% in January, the fifth decline in six months.

 

Source: statistics Canada

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