Gross domestic product by industry at factor cost

October 1998

Economic activity edged up 0.2% in October, sustained in large part by post-strike recoveries in auto manufacturing, air transportation and education. Excluding these three industries, activity in the rest of the economy fell 0.3%. October's growth in total GDP was the third straight monthly increase, following a four-month stretch of weakness. Growth in 1998, while generally maintaining an upward trend, has slackened considerably from 1997's steeper pace. Weakness so far this year has been concentrated in the goods-producing sector of the economy.

Chart: Economy edges up on strength of strike recoveries

While rebounds from strikes by General Motors workers, Air Canada pilots and Ontario teachers were the main sources of October's growth, activity in wholesaling and computer services also increased. This growth contrasted with a drop in retailing activity, continued declines in the mining sector and a fall in demand at electric and gas utilities.

Auto producers pushed manufacturing higher

Manufacturing production increased for a third consecutive month, rising 0.7%. Automakers raised output again, while producers of chemicals and rubber products also boosted output. These increases were partly offset by decreases in the primary metal products, machinery, fabricated metal products and computers and other electronic equipment industries.

Note to users

The gross domestic product (GDP) of an industry is the value added by labour and capital in transforming inputs purchased from other producers into outputs. Monthly GDP by industry is valued at 1992 prices. The estimates presented here are seasonally adjusted at annual rates. This release also includes data revisions extending back to the January 1992 reference period.

Chart: Auto production drives manufacturing higher

Eleven of 22 major industry groups, accounting for 45% of manufacturing output, were up in October. However, increases outside the automotive sector were generally small. Excluding this sector, the remaining manufacturing output fell 0.9%.

Production of autos and parts surged 11.9%. The August recovery from this summer's General Motors strike in the United States stretched into October as the company and many of its suppliers raised output again in a bid to replenish inventories south of the border. Extra shifts and new model launches by other companies also buoyed production in October.

Production of primary metal products dropped 5.2%, the largest monthly decrease in over four years. Production difficulties and scheduled maintenance shutdowns were partly responsible for the decline. Steel foundries and non-ferrous metal smelters and refiners curtailed production the most. Fabricated metal products also decreased 1.8%, as production of hardware and tools, and fabricated metal structures both fell.

Production of machinery fell 4.1%, the sixth decline in eight months. While a steep drop in the agricultural machinery industry was mainly due to temporary shutdowns, output has followed a downward trend for over a year. Makers of construction equipment also reported their seventh negative month of 1998. Overall, production of machinery is off more than 18% from its October 1997 peak. While exports of machinery have generally remained robust, domestic investment in these goods has fallen off sharply after 1997's heady expansion.

Output of electrical and electronic products slipped 0.6% in October. Production of computers and other office machines fell the most, as an industry restructuring continued. Makers of communication and wire and other electronic products also curtailed output. These declines were partly offset by increased production of telecommunications equipment for the second month in a row.

End to airline strike lifted transportation services

The end to a strike by Air Canada pilots as well as extensive seat sales led a 2.8% increase in the transportation and storage services industry in October. Activity in the air transport industry soared by 21.5%, surpassing August's pre-strike level by a wide margin. Trucking and rail transportation services, which had advanced during the September strike, edged up in October.

Ontario teachers went back to work

Education services rose 1.6%, as back-to-work legislation put an end to strikes and lockouts in several Ontario school districts at the end of September. The latest labour disruption was much smaller in scope than the one caused by last year's Ontario teachers' strike.

Wholesale up, retail down

Wholesaling activity advanced 1.3% in October. Increased sales of computers and related products were partly offset by reduced activity at distributors of furniture, fuel and other goods. The latest increase was the seventh in as many months, and extended the strong growth observed since a slowdown in the January-March period.

Retail activity slumped 1.6%, pulled down by lower automobile sales after the expiry of dealer incentives that had stimulated sales in September. Retail activity has faltered in recent months after growing at a healthy pace in 1996 and 1997. Grocery stores, gas stations and liquor stores also reported lower activity in October, while home and auto supply stores, and other food stores enjoyed moderate gains.

Chart: Retail, wholesale move in opposite directions

Poor global conditions continued to pressure mining sector

Excess supply and weak demand in world commodity markets led to a 1.6% fall in mining activity, the ninth decline so far in 1998. Production levels have dropped over 8% from peak levels reached at the end of last year. Decade-low oil prices continued to erode drilling and exploration activity, while lower production of metals such as copper, nickel and zinc paralleled price declines for all three metals to new multi-year lows. These declines were partly offset by a small increase in the production of crude petroleum and natural gas, and by a rise in output of other non-metal mines as new diamond mining in the Northwest Territories came onstream.

Warm weather reduced energy consumption

Warmer-than-usual weather led to another weak month for electric and gas utilities, as the industry's output fell 2.3% in October. Environment Canada reported that average temperatures in September, October and November were the warmest in decades. Temporary closures by large industrial users in October also contributed to the decline in demand for electrical power.

Other industries

A significant drop in the volume of stocks traded weighed heavily on the finance industries and led to a decline in activity. Real estate agents also experienced a slowdown; falling sales of existing homes in Quebec, Alberta and British Columbia were partly to blame. Construction activity changed little, after a modest recovery from summer strikes in August and September. Computer services providers were busier in October, reporting a 1.7% rise in activity.

Available on CANSIM: matrices 4677-4681.

The October 1998 issue of Gross domestic product by industry (15-001-XPB, $15/$145) will be available shortly. See How to order publications.

For analytical information, or to enquire about the methods, concepts and data quality of this release, contact Richard Evans (613-951-9145; evanric@statcan.gc.ca). For information about the purchase of data, contact Kim Lauzon (613-951-9417; lauzonk@statcan.gc.ca ), Industry Measures and Analysis Division.

Table: Gross domestic product at factor cost by industry, at 1992 prices
______________________________________________________________________________
                                May 1998(r)     June 1998(r)     July 1998(r) 
______________________________________________________________________________

                                         seasonally adjusted                  
                           _______________________________________________    
                                                                              
                                                                              
                                       month-to-month % change                
                           _______________________________________________    
                                                                              
Overall economic       
  activity                          -0.2              0.1             -0.3    
                                                                              
Goods-producing        
  industries                        -0.4             -0.2             -1.3    
                                                                              
  Agriculture                        0.2             -0.4              0.4    
  Fishing and trapping              -0.6             -3.5             -2.4    
  Logging and forestry              -3.9              0.7              2.7    
  Mining, quarrying    
    and oil wells                   -1.2             -0.3             -1.0    
  Manufacturing                     -0.2             -0.6             -2.0    
  Construction                      -0.4             -0.5             -1.0    
  Other utilities                    0.0              2.8             -0.2    
                                                                              
Services-producing     
  industries                        -0.1              0.3              0.2    
                                                                              
  Transportation and   
    storage                         -0.7              0.2             -0.7    
  Communications                     0.0              1.2              0.6    
  Wholesale trade                    0.8              0.7              1.2    
  Retail trade                      -0.1             -1.6              1.7    
  Finance and insurance             -1.1              2.3             -0.4    
  Real estate and      
    insurance agent                  0.2              0.2              0.2    
  Business services                  0.5              0.7              0.0    
  Government services                0.0             -0.1              0.0    
  Education                         -0.1              0.1             -0.2    
  Health and social    
    services                        -0.1             -0.1              0.0    
  Accommodation and    
    food                            -1.5              0.5              0.3    
  Other services                     0.3              0.1              0.0    
                                                                              
Other aggregations                                                            
Industrial production               -0.4             -0.1             -1.6    
Non-durable            
  manufacturing                      0.2             -0.3             -1.0    
Durable manufacturing               -0.6             -0.8             -2.8    
Business sector                     -0.2              0.2             -0.3    
Non-business sector                  0.0             -0.1              0.0    

______________________________________________________________________________


                               Aug. 1998(r)    Sept. 1998(r)     Oct. 1998(p) 
______________________________________________________________________________

                                         seasonally adjusted                  
                           _______________________________________________    
                                                                              
                                                                              
                                       month-to-month % change                
                           _______________________________________________    
                                                                              
Overall economic           
  activity                           0.7              0.1              0.2    
                                                                              
Goods-producing            
  industries                         1.9             -0.2              0.0    
                                                                              
  Agriculture                        0.4             -0.3              0.7    
  Fishing and trapping              -7.9              0.1             -3.7    
  Logging and forestry               3.2             -3.1              2.7    
  Mining, quarrying        
    and oil wells                   -0.8             -1.1             -1.6    
  Manufacturing                      3.1              0.4              0.7    
  Construction                       0.9              0.6             -0.1    
  Other utilities                    1.5             -2.7             -2.3    
                                                                              
Services-producing         
  industries                         0.2              0.2              0.3    
                                                                              
  Transportation and       
    storage                          0.7             -1.0              2.8    
  Communications                     1.6              1.3              0.9    
  Wholesale trade                    0.2              0.9              1.3    
  Retail trade                      -0.2              0.8             -1.6    
  Finance and insurance              0.0              0.1             -0.7    
  Real estate and          
    insurance agent                  0.1              0.0             -0.1    
  Business services                  0.6              0.7              0.2    
  Government services                0.1              0.1              0.0    
  Education                         -0.9             -0.6              1.6    
  Health and social        
    services                         0.4              0.2              0.1    
  Accommodation and        
    food                            -0.2             -0.7              0.2    
  Other services                     0.2              0.3             -0.2    
                                                                              
Other aggregations                                                            
Industrial production                2.3             -0.2             -0.1    
Non-durable                
  manufacturing                      1.5             -0.1             -0.1    
Durable manufacturing                4.4              0.8              1.3    
Business sector                      0.9              0.1              0.1    
Non-business sector                 -0.2             -0.1              0.5    

______________________________________________________________________________


                                Sept. to        Oct. 1998     Oct. 1997 to    
                               Oct. 1998                         Oct. 1998    
______________________________________________________________________________

                                         seasonally adjusted                  
                           _______________________________________________    
                                                                              
                                                                              
                                $ change(1)       $ level(1)      % change    
                                                                              
Overall economic           
  activity                          1326          720,530              2.0    
                                                                              
Goods-producing            
  industries                          -7          236,148              0.6    
                                                                              
  Agriculture                         81           11,852             -0.1    
  Fishing and trapping               -25              643            -13.6    
  Logging and forestry               122            4,680             -5.3    
  Mining, quarrying        
    and oil wells                   -446           26,633             -6.7    
  Manufacturing                      866          129,099              3.0    
  Construction                       -39           39,434              1.7    
  Other utilities                   -566           23,807             -2.9    
                                                                              
Services-producing         
  industries                        1333          484,382              2.7    
                                                                              
  Transportation and       
    storage                          893           32,713              1.5    
  Communications                     217           24,670              8.8    
  Wholesale trade                    566           43,472              6.0    
  Retail trade                      -702           44,561              2.8    
  Finance and insurance             -278           39,810              1.2    
  Real estate and          
    insurance agent                 -116           79,173              1.7    
  Business services                   82           41,354              5.8    
  Government services                -15           42,723              0.4    
  Education                          650           40,156              3.5    
  Health and social        
    services                          57           48,568              0.8    
  Accommodation and        
    food                              38           18,462              1.6    
  Other services                     -59           28,720              1.7    
                                                                              
Other aggregations                                                            
Industrial production               -146          179,539              0.7    
Non-durable                
  manufacturing                      -63           56,578              1.6    
Durable manufacturing                929           72,521              4.1    
Business sector                      691          594,635              2.2    
Non-business sector                  635          125,895              1.4    

______________________________________________________________________________


(r)  Revised figures.
(p)  Preliminary figures.
(1)  Millions of dollars at annual rate.

Steel primary forms

Week ending December 19, 1998 (Preliminary)

Steel primary forms production for the week ending December 19, 1998 totalled 285 290 tonnes, down 0.6% from the week-earlier 287 001 tonnes and down 1.1% from the year-earlier 288 551 tonnes. The cumulative total at the end of the week was 15 329 913 tonnes, a 2.7% increase compared with 14 920 476 tonnes for the same period in 1997.

For more information, or to enquire about the concepts, methods, and data quality of this release, contact Greg Milsom (613-951-7093; milsomg@statcan.gc.ca), Manufacturing, Construction and Energy Division.

Production and disposition of tobacco products

November 1998

Canadian tobacco product manufacturers slightly lowered cigarette production in November. As in October, however, numbers produced stayed well ahead of numbers shipped. As well, volume was practically the same as in October. Unsold production further bolstered normally high inventories in preparation for holiday season sales.

November production of 4.7 billion cigarettes declined 3% compared with October and was also 5% below November 1997 numbers. Year-to-date production reached 45 billion cigarettes, which was the same level as at the end of November 1997.

During November, 3.9 billion cigarettes were shipped, similar to October but 11% more than in November 1997. Year-to-date shipments of 44 billion cigarettes were 1% ahead of a year earlier.

Inventories had been brought down from 6.2 billion cigarettes in May and June, to 3.5 billion at the end of September. They rose in October to 3.9 billion and were further strengthened in November to 4.8 billion. November's inventories increased 21% compared with October but were still 13% below the closing level at the same time last year.

Available on CANSIM: matrix 46.

The November 1998 issue of Production and disposition of tobacco products (32-022-XPB, $7/$62) will be available shortly. See How to order publications.

For further information, or to enquire about the concepts, methods and data quality of this release, contact Peter Zylstra (613-951-3511; zylspet@statcan.gc.ca), Manufacturing, Construction and Energy Division.

Coal and coke statistics

October 1998

Coal production declined in all provinces except New Brunswick. Production totalled 6 420 kilotonnes, down 8.0% from October 1997. The decline was steepest in Nova Scotia, where production was 16% of the October 1997 level due to production problems. The year-to-date production figure stood at 62 907 kilotonnes, down 3.7% from the same period in 1997.

Exports decreased 9.0% from October 1997 to 2 541 kilotonnes. The main reason was a sharp 47.9% decline in exports to Japan (the largest consumer of Canadian coal) to 1 019 kilotonnes. Year-to-date figures show total exports of 29 002 kilotonnes, 4.1% below last year's level.

Coke production decreased to 262 kilotonnes, down 12.3% from October 1997.

Available on CANSIM: matrix 9.

The October 1998 issue of Coal and coke statistics (45-002-XPB, $12/$114) will be available in early January 1999. See How to order publications.

For further information, or to enquire about the methods, concepts and data quality of this release, contact André Lefebvre (613-951-3560, alefeba@statcan.gc.ca), Energy Section, Manufacturing, Construction and Energy Division.