Natural resource indicators, second quarter 2018
Volume of natural resource gross domestic product increases
Real natural resource gross domestic product (GDP), or the volume of economic activity attributable to natural resources, was up 1.8% in the second quarter, following a 0.3% decline in the first quarter. By comparison, real GDP for the total economy grew 0.7%.
Real GDP in the energy (+3.2%) and forestry (+3.2%) subsectors increased in the second quarter. Growth in energy was mainly attributable to a 6.7% increase in crude oil extraction, which more than offset large declines in refined petroleum products (-15.3%) as shutdowns affected the output of a number of refineries. Growth in the forestry subsector was widespread among product groups, led by extraction (+5.2%) and services (+4.8%). Sawmill and wood products GDP (+3.4%) also increased, on strong demand for lumber and other wood products from the American housing market.
Minerals and mining subsector real GDP decreased 3.6% in the second quarter as metallic mineral extraction fell 7.5%. This coincided with work stoppages at an iron ore mine in Newfoundland and Labrador throughout most of the quarter.
Natural resource activity totalled $243.5 billion (nominal terms, at annual rates) in the second quarter, accounting for 11.7% of Canada's GDP, up from an 11.4% share in the first quarter. This was the highest share since the fourth quarter of 2014, as energy prices continued to rise.
Natural resource prices continue to rise
Natural resource prices increased 2.1% in the second quarter, with prices up in every subsector. Prices in the forestry subsector grew the fastest (+4.8%), with pulp and paper prices rising 6.1% and sawmill and wood products prices up 5.8%. Strong housing demand in the United States, coupled with tariffs on softwood lumber, pushed prices up substantially during the quarter.
Price growth continued in the energy subsector (+2.4%) in the second quarter. There was a 5.3% rise in extracted energy product prices as crude oil prices rose 7.0%, while other extracted products (mainly coal) grew 8.3%. Prices in the mineral and mining subsector rose 1.4% on higher coal prices (+8.6%).
Trade in natural resources increases
Real natural resource exports grew 4.0% in the second quarter, following a 0.6% increase in the first quarter. Forestry exports were up 7.5% on sharply higher exports of sawmill and wood products (+12.8%). Energy exports (+6.1%) also rose, on higher exports of crude oil (+7.8%).
Real exports in the mineral and mining subsector fell 1.0%, led by lower exports of metallic minerals (-17.0%) as work stoppages during the quarter negatively affected the production of iron ore.
Real natural resource imports (+9.5%) rose sharply in the second quarter. The energy subsector was up 16.5%, with a large increase in imports of refined petroleum products (+42.9%). Imports were required to offset the declines in domestic production.
Employment in the natural resource sector rose 0.5% in the second quarter, following a 0.1% increase in the first quarter. Energy added approximately 2,400 jobs (+0.9%), the largest job gain of any subsector. Employment in the forestry subsector was widespread, with 640 jobs (+0.5%) added in the quarter.
Downstream activities rise
Secondary and tertiary processing for the forestry and minerals and mining subsectors are identified separately in the natural resource indicators for analytical purposes. An additional 1.6% of Canadian GDP was attributable to these downstream activities.
Real GDP of these additional downstream activities grew 3.0% in the second quarter. Downstream forestry activities increased 4.6% while downstream mineral and mining activities rose 2.3%
Note to readers
The Natural Resource Indicators (NRI) provide quarterly indicators for the main aggregates in the Natural Resource Satellite Account (NRSA), namely, nominal and real gross domestic product, output, real exports and imports, and employment. The estimates from this account are directly comparable to the estimates found in the Canadian System of Macroeconomic Accounts.
The energy subsector accounts for approximately two-thirds of the Canadian natural resource sector, while the mining subsector accounts for just over 20%. The forest (8%) and hunting, fishing and water (4%) subsectors account for the rest.
Core natural resources: The NRSA defines natural resource activities as those which result in goods and services originating from naturally-occurring assets used in economic activity, as well as their initial processing (primary manufacturing).
Downstream activities: Although not part of the core account, natural resources have important downstream effects on other sectors. In general, this production uses a large portion of primary manufactured products as inputs.
- Bioenergy and biofuels from forestry biomass (a subset of 1) and 2));
- Other bioproducts from forestry biomass
Total of natural resource bioproducts = Bioenergy (1) + Biofuels (2) + Other bioproducts from forestry biomass (2)
Data on natural resource indicators for the third quarter of 2018 will be released on January 17, 2019.
The Latest Developments in the Canadian Economic Accounts (13-605-X) is available.
The User Guide: Canadian System of Macroeconomic Accounts (13-606-G) is available.
The Methodological Guide: Canadian System of Macroeconomic Accounts (13-607-X) is available.
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