Posted February 2, 2009
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GDP - November 2008

Gross domestic product by industry for November 2008

Real gross domestic product fell 0.7% in November as essentially all major sectors reduced production.

The accommodation and food services sector edged up 0.3%, benefiting from a small increase in the number of overnight visitors to Canada.

The output of manufacturing, wholesale trade, construction and real estate agents and brokers were the main contributors to the November decrease. The transportation, energy, retail trade, finance and insurance sectors also retreated. On the other hand, economic activity advanced slightly for some tourism-related industries, agriculture and the public sector (health, education and public administration combined).



Manufacturing activity falls

Activity in the manufacturing sector continued to decline in November (-2.1%), reaching a level of activity nearly 4% below that recorded in the first half of 2008. The decrease was widespread in November, with 18 of the 21 major groups losing ground. The level of employment in this sector also dropped noticeably.

Motor vehicle and associated parts production continued on a downward trend that started at the end of 2007. In addition, significant decreases were registered in the manufacturing of primary metal and chemical products. Paper product manufacturing also continued to retreat due to the weak export market. As a result, the output at some pulp and paper mills has been significantly reduced. However, food and petroleum and coal products manufacturing increased.


Wholesale trade drops

The decrease in domestic and foreign demand continued to hamper wholesale trade. The volume of wholesaling activity fell 3.1% in November. The decline was broadly based. The most notable declines were in the wholesaling of machinery and equipment, home and personal products, and other products (which include agricultural, chemical, recycled material and paper products).

Construction down

Construction activities fell 1.2% in November. Residential and non-residential building construction as well as engineering and repair work declined. The construction of multi-unit residential structures retreated for the first time in 10 months, while the construction of single-family dwellings continued to decline. A contraction in the construction of commercial and industrial buildings outweighed the modest increase in institutional buildings.

The home resale market dropped considerably for a second month in a row, resulting in a 12.8% reduction in the output of real estate agents and brokers. This industry has retreated by about 40% since reaching a peak in the summer of 2007, with about half of this decline recorded in October and November 2008 alone.

Energy sector output decreases

The output of the energy sector decreased 0.5% in November following a 1.0% gain the month before. Oil and gas extraction slipped 0.5% in November due to a decline in natural gas extraction. Petroleum extraction was up slightly. The storage of natural gas decreased in both Canada and the United States. Furthermore, the distribution of natural gas to all markets was weak. Electricity generation was down 0.9% as domestic demand fell.

Contract drilling was robust in November, while rigging activities dropped significantly, resulting in a 0.5% reduction in support activities for mining and oil and gas extraction.

The output of the mining sector excluding oil and gas extraction fell 0.7% in November. A decline in metal ore mines eclipsed the rise in non-metal mines. Metal prices continued their downward trend that started in the spring of 2008.

Retail trade declines

Value added in retail trade fell 0.5% in November, a second consecutive monthly decline. The reduction in the volume of activities posted by new car dealers, general merchandise stores (which include department stores) and home furnishing stores was partially offset by the increase registered by gasoline stations and home electronic and appliance stores.

The finance and insurance sector decreases

The finance and insurance sector decreased 0.4% in November. A steep decline in the volume of trading on the stock exchanges, weak mutual fund sales, along with the softening of the output of banking and lending services, all contributed to the decrease.

Other industries

The widespread weakness in several sectors of the economy led to a reduction in the output of rail, water and truck transportation services.

Special events including a university strike and the winding down of activities related to the federal election in October hindered growth in the public sector in November.

The accommodation and food services sector edged up 0.3%, benefiting from a small increase in the number of overnight visitors to Canada.

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 2005 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 2006, 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 2005. 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 2008. For more information about monthly GDP by industry, see the National economic accounts module on our website (www.statcan.gc.ca/nea-cen/index-eng.htm).

© Copyright 2009/Exchange Morning Post/Exchange Business Communications Inc.
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