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First quarter 2009 and March 2009 (Previous release)

Real gross domestic product (GDP) declined 1.4% in the first quarter, the largest quarterly decrease since 1991. Both domestic and international demand continued to weaken. Real GDP fell 0.3% in March. The declines in February and March were less pronounced than those in the preceding three months.

Lower spending in Canada and the United States, particularly business investment in plant and equipment, led to a sharp decline in Canada's exports and imports. Business investment in Canada fell at the fastest rate since 1982. Final domestic demand was down 1.5% as personal spending, particularly on durable goods, continued to decline. Corporate and personal income also fell in the quarter.

Final domestic demand declines again

As was the case in the fourth quarter of 2008, lower production of goods (-4.0%) led the decline in the first quarter of 2009, while the production of services decreased 0.5%. All goods producing sectors retreated. The manufacturing sector, pulled down by a 26% reduction in motor vehicle and parts production, accounted for about half of the overall decline in the first quarter of 2009. Wholesale trade and transportation services declined the most among the service producing sectors. The increases in the public sector (which includes education, health and social services, as well as public administration) helped mitigate the decline in the production of services.

Real GDP contracted at an annualized rate of 5.4% in the first quarter, compared with a 5.7% decline in the US economy.

Note to readers

Percentage changes for expenditure-based and industry-based statistics (such as personal expenditures, investment, exports, imports and output) are calculated using volume measures that are adjusted for price variations. Percentage changes for income-based statistics (such as labour income, corporate profits and farm income) are calculated using nominal values, that is, not adjusted for price variations.

With the first quarter 2009 release of the Income and Expenditure Accounts, the data are revised back to the first quarter of 2005. Two articles on revisions are available in Canadian Economic Accounts Quarterly Review (13-010-X, free).

Contributions to percent change in GDP, first quarter 2009

Domestic and international demand continue to weaken

Consumer spending on goods and services contracted 0.4%, a slower pace of decline than the previous quarter. Spending on durable goods (-1.8%) was the major contributor to the first quarter decline, but did not drop as much as in the previous quarter. Purchases of services slipped for a second consecutive quarter.

Exports of goods and services dropped 8.7% in the first quarter, a faster rate of decline than in the fourth quarter (-4.8%). Exports of automotive products were down for the eighth consecutive quarter, falling an additional 33%.

Exports and imports continue to fall

Imports were down for a third quarter in a row, falling 11%, as both goods and services imports declined. Weak domestic demand led to decreases in nearly all major import categories. The Canadian dollar depreciated 2.6% against its US counterpart in the quarter.

Business investment down sharply

Business investment in machinery and equipment was down 11% in the first quarter, as investment declined in all categories.

Businesses reduced investment in non-residential structures by 3.8%. A contraction in engineering construction activity was the major contributor.

Non-farm inventories fall

Non-farm inventories were drawn down for the first time since the second quarter of 2004. Manufacturers, retailers and wholesalers all lowered their inventories.

Farm inventories accumulated in the first quarter but at a much slower pace than in 2008.

Prices fall for the second quarter in a row

The price of goods and services produced in Canada fell 1.7%, following a 2.9% drop in the fourth quarter of 2008. A sharp drop in prices for natural resources drove the decline. Export prices (-6.7%) fell more quickly than import prices (-1.6%).

The price of final domestic demand edged up 0.2% in the first quarter as consumer prices remained flat.

Purchasing power declines

Real gross domestic income (GDI), a measure of Canada's purchasing power, fell 3.0% in the first quarter (-6.2% year over year). Canada's terms of trade, a measure of export prices relative to import prices, deteriorated for the third consecutive quarter as commodity prices fell and the Canadian dollar depreciated relative to its US counterpart. As a result, the decline in real GDI was much sharper than real GDP; the third consecutive quarter this has occurred.

Economy-wide incomes down sharply

Nominal GDP decreased 3.0% in the quarter, a second consecutive sharp drop. Corporate profits fell 24% in the first quarter following a similar decrease in the fourth quarter of 2008. Both financial and non-financial industries posted lower profits.

Labour income (in nominal terms) fell 0.7% in the first quarter. Employment was down (-1.4%) as were average hours worked. Wages and salaries in goods producing industries led the decline, particularly the manufacturing and construction industries.

The personal saving rate was 4.7%, similar to the previous quarter. Prior to the fourth quarter of 2008, the personal saving rate had been below 4% for 10 consecutive quarters.

Gross domestic product by industry, March 2009

Real gross domestic product declined 0.3% in March after a 0.1% decrease in February. The declines in February and March were less pronounced than those in the preceding three months.

Economic activity continues to decline

The output of the energy and manufacturing sectors were the main sources behind the March contraction. Lower activity in wholesale trade, construction, transportation, accommodation and food services, and forestry added to the weakness. The finance and insurance sector, the public sector (health, education and public administration combined), retail trade, and mining excluding oil and gas extraction all advanced.

The output of the energy sector fell 1.9% in March. A significant drop in support activities for oil and gas extraction along with a 1.5% decrease in oil and gas production lowered output in the sector. Both the extraction of natural gas and petroleum decreased.

The output of the mining sector excluding oil and gas extraction increased 1.1% in March. There was a partial rebound in potash production as the industry continued to adjust its output to weakened demand. Despite a significant contraction in iron ore mines as the demand for steel products continued to retreat, the output of metal ore mines increased on the strength of copper and nickel extraction.

Activity in the manufacturing sector retreated 1.0% in March, continuing its downward trend. Both durable and non-durable goods manufacturing fell. Of the 21 major manufacturing groups, 15 retreated. Machinery, primary metal products and motor vehicle parts manufacturing led the reduction in durable goods. Motor vehicle production grew for a second consecutive month.

The volume of activities in wholesaling industries declined 0.7% in March, mirroring the decrease in exports and imports. The most notable drop was in the wholesaling of machinery and electronic equipment. The wholesaling of automotive products moved ahead. Value added in retail trade edged up 0.3%.

Construction activity decreased 0.4% in March. The drops in residential building construction and engineering and repair work eclipsed the increase in non-residential building construction.

The finance and insurance sector rose 0.4%. The gain was mostly attributable to an increase in the volume of trading on the stock exchanges. The gain was partially offset by a fall in mutual fund sales.

Main industrial sectors' contribution to the percent change in gross domestic product, March 2009

Products, services and contact information

Detailed analysis and tables

The National economic accounts module, accessible from the home page of the agency's website, features an up-to-date portrait of national and provincial economies and their structure.

More detailed analysis on today's releases from the national accounts, including additional charts and tables, can be found in the first quarter 2009 issue of Canadian Economic Accounts Quarterly Review, Vol. 8, no. 1 (13-010-X, free) from the Publications module of our website.

Gross domestic product by industry

Available on CANSIM: table 379-0027.

Definitions, data sources and methods: survey numbers, including related surveys, 1301.

The March 2009 issue of Gross Domestic Product by Industry, Vol. 23, no. 3 (15-001-X, free) is now available from the Publications module of our website.

Data on gross domestic product by industry for April will be released on June 30.

For general information or to order data, contact our dissemination officer (613-951-4623; toll-free 1-800-887-4623; iad-info-dci@statcan.gc.ca). To enquire about the concepts, methods or data quality of this release, contact Bernard Lefrançois (613-951-3622), Industry Accounts Division.

National economic and financial accounts

Available on CANSIM: tables 026-0009, 380-0001 to 380-0017, 380-0019 to 380-0035, 380-0056, 380-0059 to 380-0062 and 382-0006.

Definitions, data sources and methods: survey numbers, including related surveys, 1804, 1901 and 2602.

The complete seasonally adjusted quarterly National Income and Expenditure Accounts: Data Tables (13-019-X, free), and Estimates of Labour Income: Data Tables (13-021-X, free) are also now available from the Publications module of our website.

For more information, or to enquire about the concepts, methods or data quality of this release, consult the Guide to the Income and Expenditure Accounts (13-017-X, free) or contact the information officer (613-951-3640; iead-info-dcrd@statcan.gc.ca), Income and Expenditure Accounts Division.

Table 1

Real gross domestic product1
  Change Annualized change Year-over-year change
  %
First quarter 2008 -0.2 -0.7 1.7
Second quarter 2008 0.1 0.3 0.7
Third quarter 2008 0.1 0.4 0.3
Fourth quarter 2008 -0.9 -3.7 -1.0
First quarter 2009 -1.4 -5.4 -2.1
The change is the growth rate from one period to the next. The annualized change is the growth rate compounded annually. The year-over-year change is the growth rate of a given quarter compared with the same quarter in a previous year.

Table 2

Gross domestic product, implicit chain price indexes
  Fourth quarter 2007 First quarter 2008 Second quarter 2008 Third quarter 2008 Fourth quarter 2008 First quarter 2009
  Using seasonally adjusted data (2002=100)
  quarterly % change
Personal expenditure on consumer goods and services 0.2 0.4 0.8 0.9 -0.5 0.0
Business gross fixed capital formation -0.4 0.8 1.4 1.3 3.3 0.3
Exports of goods and services 0.4 5.8 7.4 3.1 -4.1 -6.7
Imports of goods and services -3.0 3.7 3.8 4.5 5.7 -1.6
Gross domestic product at market prices 1.1 1.4 2.4 0.8 -2.9 -1.7
Final domestic demand 0.4 0.6 1.0 1.1 0.5 0.2

Table 3

Gross domestic product, implicit chain price indexes
  Fourth quarter 2007 First quarter 2008 Second quarter 2008 Third quarter 2008 Fourth quarter 2008 First quarter 2009
  Using seasonally adjusted data (2002=100)
  year-over-year % change
Personal expenditure on consumer goods and services 1.8 1.3 1.5 2.3 1.6 1.2
Business gross fixed capital formation 1.1 0.5 1.8 3.2 7.1 6.5
Exports of goods and services -1.5 1.3 10.8 17.6 12.4 -0.9
Imports of goods and services -7.6 -5.6 1.1 9.1 18.9 12.8
Gross domestic product at market prices 3.6 3.5 4.9 5.8 1.6 -1.4
Final domestic demand 1.9 1.4 1.6 3.1 3.3 2.8

Table 4

Real gross domestic income, volume index (2002=100)
  Change Annualized change Year-over-year change
  %
First quarter 2008 0.5 2.2 4.0
Second quarter 2008 1.3 5.5 3.9
Third quarter 2008 -0.3 -1.1 3.1
Fourth quarter 2008 -4.3 -16.0 -2.7
First quarter 2009 -3.0 -11.6 -6.2
The change is the growth rate from one period to the next. The annualized change is the growth rate compounded annually. The year-over-year change is the growth rate of a given quarter compared with the same quarter in a previous year.

Table 5

Monthly gross domestic product by industry at basic prices, chained (2002) dollars
  October 2008r November 2008r December 2008r January 2009r February 2009r March 2009p
  Seasonally adjusted
  month-to-month % change
All industries -0.1  -0.7  -1.0  -0.6  -0.1  -0.3 
Goods-producing industries -0.1 -1.4 -1.9 -1.6 -0.5 -1.1
Service-producing industries -0.1 -0.3 -0.5 -0.1 0.1 0.0
Industrial production -0.2 -1.7 -2.0 -1.8 -0.5 -1.3
Manufacturing -1.1 -2.5 -2.8 -3.1 -0.3 -1.0
Wholesale trade -2.3 -2.4 -2.4 -2.7 -0.4 -0.7
Energy sector 1.1 -0.7 -0.9 0.1 -0.1 -1.9
revised
preliminary

Table 6

Canadian economic accounts key indicators1
  Fourth quarter 2007 First quarter 2008 Second quarter 2008 Third quarter 2008 Fourth quarter 2008 First quarter 2009 2007 2008
  Seasonally adjusted at annual rates      
  millions of dollars at current prices
Gross domestic product by income and by expenditure                
Wages, salaries and supplementary labour income 799,508 812,496 820,916 827,116 831,936 826,304 784,839 823,116
  1.9 1.6 1.0 0.8 0.6 -0.7 5.6 4.9
Corporation profits before taxes 207,212 213,056 229,532 237,708 182,900 138,676 204,131 215,799
  0.8 2.8 7.7 3.6 -23.1 -24.2 4.1 5.7
Interest and miscellaneous investment income 73,620 76,572 85,660 86,136 77,568 73,692 71,847 81,484
  1.0 4.0 11.9 0.6 -9.9 -5.0 7.7 13.4
Net income of unincorporated business 90,924 93,516 95,500 97,860 98,108 97,432 90,407 96,246
  0.0 2.9 2.1 2.5 0.3 -0.7 4.4 6.5
Taxes less subsidies 169,128 164,368 166,016 166,464 163,220 160,280 166,443 165,017
  0.9 -2.8 1.0 0.3 -1.9 -1.8 3.7 -0.9
Personal disposable income 915,076 938,832 948,596 955,512 960,852 955,260 897,562 950,948
  1.5 2.6 1.0 0.7 0.6 -0.6 5.3 5.9
Personal saving rate2 1.9 3.3 3.4 3.1 4.9 4.7 2.5 3.7
  ... ... ... ... ... ... ... ...
  millions of chained (2002) dollars
Personal expenditure on consumer goods and services 805,026 810,096 812,310 813,469 807,018 803,863 787,063 810,723
  1.9 0.6 0.3 0.1 -0.8 -0.4 4.6 3.0
Government current expenditure on goods and services 257,965 261,546 264,477 264,462 266,084 266,884 254,740 264,142
  0.8 1.4 1.1 -0.0 0.6 0.3 3.3 3.7
Gross fixed capital formation 317,660 318,328 318,118 318,616 305,999 288,780 312,482 315,265
  0.8 0.2 -0.1 0.2 -4.0 -5.6 3.7 0.9
Investment in inventories 25,132 9,362 14,466 14,872 10,386 -5,823 15,006 12,272
  ... ... ... ... ... ... ... ...
Exports of goods and services 501,456 498,552 493,352 488,152 464,964 424,655 510,323 486,255
  -1.7 -0.6 -1.0 -1.1 -4.8 -8.7 1.1 -4.7
Imports of goods and services 592,697 585,633 589,968 584,824 547,196 485,937 572,078 576,905
  1.6 -1.2 0.7 -0.9 -6.4 -11.2 5.8 0.8
Gross domestic product at market prices 1,325,490 1,323,013 1,324,093 1,325,452 1,312,880 1,294,805 1,315,907 1,321,360
  0.3 -0.2 0.1 0.1 -0.9 -1.4 2.5 0.4
  millions of chained (2002) dollars
Gross domestic product by industry at basic prices                
Goods producing industries 371,248 367,134 365,400 365,882 357,118 342,855 374,126 363,884
  -1.1 -1.1 -0.5 0.1 -2.4 -4.0 0.5 -2.7
Industrial production 271,769 267,075 264,894 264,930 257,134 245,769 274,908 263,508
  -1.5 -1.7 -0.8 0.0 -2.9 -4.4 0.2 -4.1
Energy sector 84,855 83,904 82,469 83,128 82,561 81,416 85,827 83,016
  -1.4 -1.1 -1.7 0.8 -0.7 -1.4 1.0 -3.3
Manufacturing 182,957 178,755 178,278 176,698 168,813 158,450 185,311 175,636
  -1.4 -2.3 -0.3 -0.9 -4.5 -6.1 -0.9 -5.2
Non-durable manufacturing 71,623 70,752 70,682 70,168 68,216 66,831 72,507 69,955
  -1.8 -1.2 -0.1 -0.7 -2.8 -2.0 -1.8 -3.5
Durable manufacturing 111,673 108,265 107,847 106,769 100,720 91,483 113,149 105,900
  -1.2 -3.1 -0.4 -1.0 -5.7 -9.2 -0.3 -6.4
Construction 73,467 74,367 74,840 75,508 74,695 72,185 72,890 74,853
  0.3 1.2 0.6 0.9 -1.1 -3.4 2.9 2.7
Services producing industries 857,799 861,637 865,248 867,494 863,153 858,866 846,591 864,383
  0.8 0.4 0.4 0.3 -0.5 -0.5 3.5 2.1
Wholesale trade 72,063 71,837 71,722 71,009 67,030 63,291 70,256 70,399
  1.6 -0.3 -0.2 -1.0 -5.6 -5.6 5.5 0.2
Retail trade 73,734 74,486 74,983 75,154 73,654 73,067 72,391 74,570
  1.5 1.0 0.7 0.2 -2.0 -0.8 5.8 3.0
Transportation and warehousing 56,863 56,845 57,122 56,966 56,093 54,959 56,624 56,757
  -0.2 -0.0 0.5 -0.3 -1.5 -2.0 1.7 0.2
Finance, insurance, real estate and renting 243,946 245,802 246,485 247,682 247,775 248,699 240,536 246,936
  0.7 0.8 0.3 0.5 0.0 0.4 4.0 2.7
Information and communication technologies 58,065 58,327 58,805 58,967 58,758 58,318 57,199 58,714
  0.7 0.5 0.8 0.3 -0.4 -0.7 4.0 2.6
not applicable
The first line is the series itself expressed in millions of dollars, seasonally adjusted at annual rates. The second line is the period-to-period percentage change.
Actual rate.