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Natural resource indicators, first quarter 2022

Released: 2022-06-22

Natural resources real gross domestic product falls in the first quarter

Real gross domestic product (GDP) of the natural resources sector edged down 0.1% in the first quarter of 2022, after a similar movement in the fourth quarter of 2021.

In contrast, the economy-wide real GDP rose 0.8% in the first quarter.

Chart 1  Chart 1: Natural resources real gross domestic product
Natural resources real gross domestic product

The first quarter real GDP decrease was driven by the energy subsector (-0.2%) due to a decline in real GDP associated with crude oil and services. This decrease was partially offset by the forestry (+3.8%) and minerals and mining (+0.2%) subsectors which saw increases in real GDP.

The increase in forestry was driven by primary sawmill products (+8.3%) due to a strong demand for wood for residential construction in the United States and Canada, as high household renovation demand continued to complement new housing starts. GDP associated with the production of coal also increased (+11.7%) in the first quarter, after falling 19.2% in the fourth quarter of 2021, due to higher rail movement and exports after the flooding in British Columbia. The increase in coal production was supported by higher international demand as natural gas became more expensive and scarce due to sanctions on Russia related to the country's invasion of Ukraine.

Real GDP of hunting, fishing and water fell 6.5% in the first quarter.

Quarterly export and import volumes decline

Natural resources export volumes decreased 1.5% in the first quarter. Energy exports were down 2.0%, driven by crude oil (-2.0%) as increased US domestic production and transportation bottlenecks in Canada continued. Exports of the minerals and mining subsector fell 2.5%, driven by lower volumes of metallic minerals (-16.2%) partly due to railway labour disputes. Non-metallic minerals increased 7.4%, as demand for Canadian fertilizers increased following the Russian invasion of Ukraine. The resulting sanctions that have been imposed on trade with Russia and Belarus, which together produce approximately 40% of the world's potash supply, pushed Canadian exports of potash to record levels.

Import volumes were down 6.2% in the first quarter, led by energy (-11.5%), followed by forestry (-4.0%). Minerals and mining (+1.6%) and hunting, fishing and water (+2.7%) imports increased in the first quarter.

Natural resource prices surge

Overall, natural resource prices rose 11.6% in the first quarter. Primary sawmill and wood (+30.7%) and crude oil (+23.5%) prices rose significantly. Russia's aggression against Ukraine and the subsequent sanctions levelled against Russia contributed to market uncertainty about oil supply, contributing to the substantial price increase. This occurred while global oil inventories were low. According to the U.S. Energy Information Administration, commercial oil inventories in the Organisation for Economic Co-operation and Development were at their lowest level since mid-2014.

Chart 2  Chart 2: Natural resource prices
Natural resource prices

Minerals and mining prices increased 6.5% in the first quarter, led by non-metallic minerals (+10.3%) and metallic minerals (+7.5%). Global aluminum supplies tightened in February as higher energy prices led to production curtailments at European smelters, despite continued demand. Inventories in Shanghai, as well as in London Metal Exchange (LME) warehouses, have fallen since the start of 2022. On February 8th, the benchmark price of aluminum at the LME hit its highest level since 2008. In addition to high energy costs, uncertainty about future supply from Russia also drove up the price of aluminum.

Nominal gross domestic product

Surging prices boosted growth in natural resources nominal GDP by 11.7% in the first quarter. Expressed as an annual rate, the nominal GDP of natural resources was $340 billion in the first quarter, representing 13.4% of the Canadian economy.

Chart 3  Chart 3: Nominal natural resource gross domestic product at highest point since measurement started in 2008
Nominal natural resource gross domestic product at highest point since measurement started in 2008

Employment increases

Employment in the natural resources sector rose 1.8% in the first quarter, after increasing 1.5% in the fourth quarter of 2021. The minerals and mining (+4,200 jobs), energy (+3,400 jobs), forestry (+2,700 jobs) and hunting, fishing and water (+300 jobs) subsectors all saw increases in employment, as industries increased employment to respond to rising prices.

Chart 4  Chart 4: Employment changes, first quarter of 2022
Employment changes, first quarter of 2022

Downstream activities

For analytical purposes, secondary and tertiary processing for the forestry and minerals and mining subsectors are identified separately. The nominal GDP of these downstream activities reached $10.0 billion in the first quarter, a 6.5% increase. Prices were up 4.5%, following a 3.8% increase in the fourth quarter of 2021.

  Note to readers

Data on natural resources for the first quarter of 2022 have been released along with revised data from the first to the fourth quarter of 2021. The natural resource indicators provide quarterly indicators for the main aggregates in the Natural Resources Satellite Account (NRSA), namely, gross domestic product, output, exports, imports, and employment. The estimates from this account are directly comparable to the estimates in the Canadian System of Macroeconomic Accounts.

Core natural resources: The NRSA defines natural resource activities as those that 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.

Employment estimates reported in this release align with the noted definitions of natural resource subsectors. Consequently, these estimates may differ from those release by the labour productivity program.

Next release

Data on natural resource indicators for the second quarter of 2022 will be released on September 22.

Products

For more information on energy in Canada, including production, consumption, international trade and much more, please visit the Canadian Centre for Energy Information website and follow #energynews on social media.

The Economic accounts statistics portal, accessible from the Subjects module of the Statistics Canada website, features an up-to-date portrait of national and provincial economies and their structures.

Additional information can be found in the articles "The Natural Resources Satellite Account: Feasibility study" and "The Natural Resources Satellite Account – Sources and methods," which are part of the Income and Expenditure Accounts Technical Series (Catalogue number13-604-M).

The Latest Developments in the Canadian Economic Accounts (Catalogue number13-605-X) is available.

The User Guide: Canadian System of Macroeconomic Accounts (Catalogue number13-606-G) is available.

The Methodological Guide: Canadian System of Macroeconomic Accounts (Catalogue number13-607-X) is available.

Contact information

For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca) or Media Relations (statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca).

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