Economic Insights
Recent Developments in the Canadian Economy: Spring 2019

by Guy Gellatly and Carter McCormack,
Analytical Studies Branch

11-626-X No. 093
Release date: April 29, 2019
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This article in the Economic Insights series provides users with an integrated summary of recent changes in output, employment, household demand, international trade and prices. Organized as a statistical summary of major indicators, the report is designed to inform about recent developments in the Canadian economy, highlighting major changes in the economic data during the second half of 2018 and early 2019. Unless otherwise noted, the tabulations presented in this report are based on seasonally adjusted data available as of April 18, 2019.

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Overview

Economic growth slowed in the second half of 2018 as business investment in machinery and equipment and non-residential structures declined. Investment in housing also contracted in the second half of the year. While households continued to support growth, the pace of household spending slowed as outlays on durables declined. Following slower growth in the third quarter, export volumes edged down in the fourth.

In contrast, employment strengthened in the second half of the year, led by increases among private sector employees and core-age workers. Increases in both full-time and part-time work contributed to higher employment as overall gains were concentrated in services. Over two-thirds of the net increase in employment during the last six months of 2018 reflected gains in British Columbia and Ontario.

Overall, the growth in real gross domestic product, measured on a year-over-year basis, slowed to 1.1% in December, matching the increase in employment. The output of goods industries at year end was down 1.2% from levels in December 2017 while services rose 1.9%. More recently, the pace of output and employment growth strengthened in early 2019 (Chart 1). 

Chart 1 Output and employment

Data table for Chart 1 
Data table for Chart 1
Output and employment
Table summary
This table displays the results of Output and employment Real gross domestic product and Employment (appearing as column headers).
Real gross domestic product Employment
2010
January 0.8 0.0
February 1.9 0.4
March 3.2 0.6
April 3.4 1.3
May 4.0 1.6
June 4.1 2.1
July 4.1 2.0
August 4.5 2.1
September 3.7 1.7
October 4.1 1.8
November 4.0 1.5
December 4.4 1.8
2011
January 4.1 1.9
February 3.4 1.8
March 3.2 1.8
April 3.3 1.6
May 2.6 1.4
June 2.8 1.2
July 3.4 1.4
August 3.6 1.5
September 3.9 1.7
October 3.4 1.4
November 3.0 1.2
December 2.8 1.2
2012
January 2.4 0.7
February 2.3 0.7
March 2.2 1.1
April 2.6 1.5
May 3.0 1.4
June 2.6 1.3
July 2.1 1.0
August 1.4 1.2
September 1.1 1.3
October 1.1 1.5
November 1.4 1.7
December 0.9 1.8
2013
January 1.6 2.0
February 2.2 2.2
March 2.3 1.5
April 2.1 1.1
May 2.2 1.5
June 1.8 1.4
July 2.2 1.5
August 2.8 1.4
September 3.1 1.2
October 3.7 1.2
November 3.5 1.0
December 3.1 0.7
2014
January 2.5 0.7
February 2.7 0.6
March 2.7 0.9
April 2.7 0.7
May 3.0 0.4
June 3.9 0.5
July 3.5 0.7
August 2.8 0.4
September 2.8 0.5
October 2.6 0.8
November 2.4 0.7
December 3.0 0.6
2015
January 2.5 0.7
February 1.9 0.8
March 1.5 0.8
April 1.3 0.8
May 0.6 1.1
June 0.4 1.0
July 0.5 0.9
August 0.9 1.1
September 0.1 0.9
October 0.0 0.7
November 0.1 0.7
December 0.0 0.9
2016
January 1.0 0.7
February 1.0 0.6
March 0.8 0.7
April 0.9 0.8
May 0.4 0.6
June 0.6 0.6
July 0.9 0.4
August 1.0 0.5
September 1.6 0.9
October 1.5 1.0
November 1.6 1.0
December 1.9 1.1
2017
January 1.7 1.5
February 2.1 1.6
March 2.9 1.5
April 3.3 1.6
May 4.3 1.8
June 4.0 2.0
July 3.6 2.2
August 3.2 2.1
September 3.2 1.8
October 3.3 1.7
November 3.5 2.1
December 3.4 2.3
2018
January 2.7 1.5
February 2.7 1.5
March 2.6 1.6
April 2.1 1.5
May 2.0 1.2
June 1.9 1.2
July 2.0 1.3
August 2.2 0.9
September 1.9 1.3
October 2.0 1.2
November 1.4 1.3
December 1.1 1.1
2019
January 1.6 1.8
February Note ..: not available for a specific reference period 2.0
March Note ..: not available for a specific reference period 1.8

For 2018 as a whole, real GDP in Canada increased 1.8%, following 3.0% in 2017. Increased household spending accounted for about two-thirds of economic growth in 2018, while higher goods exports also supported gains (Chart 2). In the United States, real GDP rose by 2.9% in 2018.

Chart 2 Contributions to real gross domestic product growth, selected components

Data table for Chart 2 
Data table for Chart 2
Contributions to real GDP growth, selected components

Table summary
This table displays the results of Contributions to real GDP growth. The information is grouped by Selected components (appearing as row headers), 2017 and 2018, calculated using percentage-point contributions units of measure (appearing as column headers).
Selected components 2017 2018
percentage-point contributions
Imports—services -0.157 -0.080
Imports—goods -1.256 -0.847
Exports—services 0.178 0.208
Exports—goods 0.181 0.800
Investment in inventories 0.821 -0.204
Business investment—machinery and equipment 0.175 0.214
Business investment—non-residential structures 0.063 -0.049
Business investment—residential structures 0.186 -0.175
Household final consumption expenditure 2.041 1.178
Gross domestic product at market prices 2.979 1.834

Household spending slowed as outlays on consumer durables fell

The pace of economic growth slowed in the second half of 2018, as business investment contracted and household spending slowed.Note 1 Real GDP rose 0.1% in the fourth quarter, the smallest quarterly increase since the most recent decline in GDP in the second quarter of 2016. Investment in housing continued to decline in the second half of the year, while exports weighed on growth in the fourth quarter. In the United States, real GDP growth slowed to 2.2% (annualized) in the fourth quarter, after 3.4% in the third.

Consumers contributed to growth throughout 2018 although the pace of spending slowed (Chart 3). Household final expenditures rose 0.2% in the fourth quarter and 0.3% in the third. Outlays on consumer durables decreased throughout the second half as households spent less on autos.Note 2 Outlays on services increased in the second half, supported by higher spending on life insurance and financial services late in the year.

For 2018, household final expenditures rose by 2.1%, down from 3.6% in 2017.  

Chart 3 Real gross domestic product, selected aggregates

Data table for Chart 3 
Data table for Chart 3
Real gross domestic product, selected aggregates
Table summary
This table displays the results of Real gross domestic product. The information is grouped by Selected aggregates (appearing as row headers), Household expenditure, Government current expenditure, Non-residential business investment, Goods exports and Housing, calculated using index (first quarter of 2010 = 100) units of measure (appearing as column headers).
Selected aggregates Household expenditure Government current expenditure Non-residential business investment Goods exports Housing
index (first quarter of 2010 = 100)
2010
First quarter 100.0 100.0 100.0 100.0 100.0
Second quarter 100.8 99.9 104.8 104.0 98.8
Third quarter 101.7 100.2 108.7 103.7 97.0
Fourth quarter 102.6 100.9 114.1 106.5 96.3
2011
First quarter 102.8 101.0 117.3 106.9 98.2
Second quarter 103.2 101.4 120.2 104.5 98.1
Third quarter 103.7 101.8 120.6 111.1 100.6
Fourth quarter 104.3 102.1 124.2 112.4 101.6
2012
First quarter 104.9 102.2 127.1 112.1 106.1
Second quarter 105.1 101.9 131.1 112.0 105.5
Third quarter 105.7 102.6 131.4 111.3 104.6
Fourth quarter 106.3 102.5 134.3 110.9 104.6
2013
First quarter 106.9 101.4 136.7 113.1 103.7
Second quarter 107.9 101.0 138.1 115.2 105.3
Third quarter 108.7 101.5 139.0 113.7 104.6
Fourth quarter 109.4 102.1 141.0 115.7 104.5
2014
First quarter 109.8 102.4 142.5 114.7 103.2
Second quarter 110.8 102.0 143.9 122.3 105.6
Third quarter 111.6 102.0 145.9 124.5 108.0
Fourth quarter 112.4 101.7 148.8 124.8 108.3
2015
First quarter 112.6 103.1 136.2 123.1 109.1
Second quarter 113.2 103.2 130.6 125.1 109.2
Third quarter 114.0 103.8 125.7 128.1 111.3
Fourth quarter 114.8 103.5 122.6 126.7 111.8
2016
First quarter 115.1 104.3 117.4 129.3 113.5
Second quarter 115.5 105.7 115.7 122.7 114.4
Third quarter 116.4 105.4 118.0 126.6 114.1
Fourth quarter 117.3 105.9 112.7 127.3 114.9
2017
First quarter 118.5 106.5 116.2 127.6 117.2
Second quarter 119.9 107.2 118.0 129.5 115.9
Third quarter 120.9 107.7 119.5 125.1 115.6
Fourth quarter 121.7 108.8 121.8 127.0 119.1
2018
First quarter 122.1 109.4 123.8 126.7 116.1
Second quarter 122.6 110.1 123.4 132.0 116.3
Third quarter 123.0 110.5 119.9 133.5 114.6
Fourth quarter 123.2 111.1 116.5 133.0 110.2

Export volumes slowed in the third quarter before declining 0.1% in the fourth on lower exports of forestry products, building materials, and metal products. Exports of passenger cars and light trucks also declined throughout the second half, while energy exports edged down in the fourth quarter on lower shipments of refined petroleum products.Note 3 Imports edged down 0.3% in the fourth quarter following a 2.2% decline in the third. Lower imports of basic and industrial chemicals and motor vehicles and parts contributed to declines throughout the second half. Energy imports were unchanged in the fourth quarter, following an 8.7% decline in the third.Note 4

The terms of trade declined in the fourth quarter on notable reductions in the price of crude oil exports.Note 5 Real gross domestic income, a measure of the purchasing power of domestic production, decreased 1.1% in fourth quarter. At the same time, nominal GDP fell 0.7%, the first quarterly decline in economy-wide income in three years.   

For 2018, export volumes rose 3.3%, following a 1.1% increase in 2017. Import volumes rose 2.9% in 2018, after advancing 4.2% in 2017.

Lower business investment in non-residential structures and M&E

Non-residential business investment contracted during the second half of 2018 after trending higher during 2017 and early 2018 (Chart 4). Combined outlays on non-residential structures and machinery and equipment (M&E) were down 2.9% in the fourth quarter following a similar decline in the third. Business spending on these non-residential assets in the fourth quarter was down 4% from levels in late 2017, and 22% below levels observed in late 2014.

Chart 4 Business gross fixed capital formation

Data table for Chart 4 
Data table for Chart 4
Business gross fixed capital formation
Table summary
This table displays the results of Business gross fixed capital formation Total business gross fixed capital formation, Residential structures, Non-residential structures, Machinery and equipment and Intellectual property products, calculated using index (first quarter of 2014 = 100) units of measure (appearing as column headers).
Total business gross fixed capital formation Residential structures Non-residential structures Machinery and equipment Intellectual property products
index (first quarter of 2014 = 100)
2014
First quarter 100.0 100.0 100.0 100.0 100.0
Second quarter 101.2 102.3 100.8 101.4 98.5
Third quarter 102.7 104.7 102.0 103.3 97.9
Fourth quarter 104.2 105.0 103.9 105.5 100.9
2015
First quarter 98.6 105.7 93.6 99.4 92.9
Second quarter 95.8 105.9 89.2 96.4 87.2
Third quarter 94.3 107.9 85.1 94.3 85.3
Fourth quarter 93.3 108.4 81.8 94.1 86.2
2016
First quarter 91.6 110.0 78.1 90.6 84.6
Second quarter 91.2 110.9 75.3 92.4 84.5
Third quarter 91.7 110.6 80.0 88.3 81.4
Fourth quarter 89.8 111.4 74.6 87.6 80.6
2017
First quarter 92.2 113.6 75.9 92.0 83.6
Second quarter 92.5 112.4 77.0 93.6 84.1
Third quarter 93.1 112.1 78.7 93.6 84.1
Fourth quarter 95.0 115.4 79.6 96.4 83.5
2018
First quarter 95.2 112.5 79.2 101.4 86.8
Second quarter 95.0 112.7 78.6 101.8 86.8
Third quarter 93.0 111.1 76.9 97.8 85.2
Fourth quarter 90.7 106.8 73.9 96.6 90.4

Business investment in non-residential structures declined 4.0% in the fourth quarter, following a 2.1% decline in the third. Lower outlays on non-residential buildings and engineering structures contributed to declines late in the year. Investment in M&E fell 1.2% in the fourth quarter following a 3.9% decline in the third, as businesses spent less on industrial M&E. Business investment in intellectual property rose 6.1% in the fourth quarter, supported by higher spending on mineral exploration and evaluation. Outlays on research and development and software also increased in the fourth quarter. Overall business spending on intellectual property in the fourth quarter was 8% higher than in late 2017, but about 10% below levels reported in late 2014.   

For 2018, non-residential business investment rose 1.7% following a 2.5% increase in 2017.

Going forward, private sector organizations anticipate spending 2.8% more on non-residential tangible assets in 2019, following a 0.7% increase in 2018 (Chart 5).Note 6 Private-sector outlays are expected to increase in Quebec, British Columbia and Ontario and decrease in Alberta. Oil and gas extraction industries anticipate spending $36.7 billion on capital assets in 2019, matching reported outlays in 2018. Oil and gas producers in Alberta expect to spend $25.9 billion, down 3% from outlays in 2018. Manufacturing industries expect to spend $19.1 billion in 2019, a 4.9% increase over 2018 levels. Higher intentions among chemical producers supported the gain, while manufacturers of transportation equipment and petroleum and coal products anticipate lower outlays. Manufacturing intentions rose in Quebec and Alberta and declined in Ontario and British Columbia.

Chart 5 Non-residential capital expenditures on tangible assets

Data table for Chart 5 
Data table for Chart 5
Non-residential capital expenditures on tangible assets

Table summary
This table displays the results of Non-residential capital expenditures on tangible assets
2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018 and 2019, calculated using index (2010=100) units of measure (appearing as column headers).
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
index (2010=100)
Total 100.0 107.7 114.2 117.3 124.7 115.2 105.4 110.0 112.7 115.5
Private sector organizations 100.0 113.1 121.8 127.9 138.6 120.8 107.3 108.8 109.6 112.6
Public sector organizations 100.0 97.4 99.6 97.2 98.0 104.4 101.7 112.1 118.7 121.1

Investment in housing contracted in the second half

Investment in residential structures contracted during the second half of 2018. Outlays on housing fell 3.9% in the fourth quarter, following a 1.4% decline in the third. Spending on new construction and renovations declined in both quarters. Ownership transfer costs, which reflect the volume of activity in resale markets, were down in the fourth quarter after advancing in the third. Spending on ownership transfer costs in the fourth quarter was down 13% from levels in late 2017, prior to the introduction of the new minimum qualifying rate for uninsured mortgages which took effect in January 2018.

For 2018, investment in housing fell 2.3% following a 2.4% increase in 2017.Note 7

Lower labour productivity in late 2018

Business sector labour productivity declined by 0.4% in the fourth quarter, following two consecutive quarterly increases. Declines in construction, agriculture and forestry and wholesale trade weighed on labour productivity late in the year. Industrial capacity utilization also fell in the fourth quarter, reflecting declines in manufacturing and construction. For 2018 as a whole, business sector labour productivity was unchanged, after increasing by 1.9% in 2017.

Declines in construction contributed to lower goods output

Goods output contracted during the second half of 2018. Broad-based declines in construction activity contributed to lower goods production in the third and fourth quarters, along with declines in support activities for mining and oil and gas extraction. Lower manufacturing output weighed on goods production in the fourth quarter, following gains in the third (Chart 6).

Chart 6 Real gross domestic product, selected industries

Data table for Chart 6 
Data table for Chart 6
Real gross domestic product, selected industries
Table summary
This table displays the results of Real gross domestic product Mining, quarrying, and oil and gas , Construction, Manufacturing and Professional, scientific and technical services, calculated using index (January 2010=100) units of measure (appearing as column headers).
Mining, quarrying, and oil and gas Construction Manufacturing Professional, scientific and technical services
index (January 2010=100)
2010
January 100.0 100.0 100.0 100.0
February 103.1 100.5 101.3 100.0
March 104.5 100.9 102.9 100.4
April 104.0 101.3 102.8 100.5
May 109.2 101.1 103.3 100.3
June 108.5 101.6 104.6 100.4
July 108.3 101.8 104.6 101.2
August 107.9 102.4 104.5 101.0
September 106.2 102.7 103.8 101.3
October 110.0 103.1 103.7 101.9
November 111.4 103.4 103.1 102.5
December 114.0 103.6 104.8 103.2
2011
January 111.4 104.6 105.8 103.8
February 110.9 105.0 104.9 104.3
March 113.4 104.4 105.7 104.6
April 114.2 104.2 105.7 104.7
May 110.0 104.0 105.1 105.0
June 111.9 105.1 105.5 105.9
July 115.3 105.8 107.1 105.9
August 119.3 106.5 106.9 106.4
September 119.5 107.0 108.1 107.0
October 117.5 107.1 108.3 107.6
November 116.6 107.6 108.9 108.0
December 116.9 108.7 110.7 108.5
2012
January 116.7 109.6 110.2 108.3
February 113.6 110.8 108.3 108.4
March 113.4 112.1 108.8 108.2
April 114.6 113.9 109.6 108.4
May 114.5 113.9 109.3 108.6
June 112.4 114.1 109.3 108.6
July 110.5 114.5 109.3 109.5
August 108.4 115.0 108.7 109.5
September 109.6 115.6 107.5 109.6
October 110.5 116.7 106.6 109.3
November 112.4 117.1 107.5 109.1
December 113.7 117.5 106.2 109.5
2013
January 114.8 117.5 107.3 109.8
February 117.7 118.1 107.6 109.7
March 118.2 118.8 108.1 110.1
April 117.5 119.6 107.3 110.7
May 116.4 120.1 107.4 111.4
June 115.3 117.2 107.3 111.5
July 117.3 119.7 107.1 111.6
August 119.3 120.1 107.7 112.2
September 120.2 119.7 109.1 113.3
October 121.6 120.1 110.4 113.5
November 121.7 120.3 110.0 114.1
December 121.0 119.0 107.7 114.6
2014
January 121.9 120.1 108.2 114.1
February 124.4 120.8 109.8 114.7
March 127.0 120.3 109.0 115.5
April 129.9 120.0 109.4 116.2
May 130.1 121.6 111.2 116.7
June 131.6 122.2 112.2 118.3
July 128.5 123.2 113.1 119.5
August 125.4 122.8 111.7 119.8
September 128.9 123.2 112.5 119.2
October 130.1 124.7 112.6 119.0
November 130.2 124.9 111.7 119.5
December 128.6 124.3 113.9 118.9
2015
January 129.3 122.9 112.5 118.7
February 126.7 121.4 111.2 118.2
March 121.8 120.0 112.3 117.8
April 120.1 119.5 112.1 117.5
May 120.5 120.4 111.9 117.3
June 124.6 119.6 110.8 116.9
July 128.0 119.2 111.4 116.8
August 129.5 119.3 113.1 116.9
September 122.7 118.5 112.0 116.4
October 124.0 118.2 111.7 116.6
November 123.8 117.7 111.7 116.8
December 123.1 117.2 112.4 116.9
2016
January 123.6 116.9 113.7 117.1
February 121.7 116.5 112.6 116.9
March 118.2 115.2 112.4 117.2
April 115.9 115.0 112.4 117.1
May 108.4 113.8 110.3 117.3
June 113.4 112.9 112.3 117.3
July 119.3 113.1 112.5 117.5
August 120.3 112.2 113.0 117.4
September 123.0 113.1 113.5 117.9
October 124.0 113.2 112.0 118.1
November 127.1 113.8 113.4 118.1
December 128.1 114.6 114.5 118.2
2017
January 129.3 115.7 115.3 118.5
February 128.3 116.6 114.9 119.1
March 127.3 116.8 115.7 119.6
April 130.0 118.1 116.1 120.2
May 133.5 117.1 117.2 120.7
June 131.8 119.2 118.5 120.4
July 132.4 119.6 117.8 120.7
August 132.5 119.9 116.4 121.0
September 132.7 121.3 116.8 121.2
October 129.0 122.1 116.6 121.2
November 131.1 122.4 118.7 121.9
December 131.9 122.3 119.4 122.7
2018
January 131.0 121.9 118.7 122.3
February 134.4 122.8 119.4 122.8
March 138.2 122.4 119.6 123.1
April 139.7 122.2 119.1 123.6
May 140.8 122.4 118.0 123.8
June 138.1 122.0 119.6 124.3
July 138.4 120.4 120.7 124.7
August 138.9 118.9 120.1 125.0
September 137.0 117.7 119.9 125.4
October 136.4 116.7 120.6 125.8
November 135.9 115.7 120.0 126.4
December 135.1 114.7 119.1 127.2
2019
January 130.8 116.9 120.9 127.6

Construction activity contracted for seven consecutive months from June to December. Construction output at year end was 6% lower than levels at mid-year, reflecting broad-based declines in residential and non-residential building construction and engineering construction.

Manufacturing declined during four of the last six months of 2018. Factory output at year end was little changed from mid-year levels (-0.4%). Declines among automotive and parts manufacturers weighed on factory output during the second half. Wood products, paper manufacturing and printing products also trended lower, while fabricated metal products and computer and electronic products strengthened.

Gains among service industries offset lower goods output during the second half of 2018. Finance and insurance and professional services contributed to growth in the third and fourth quarters, while retail trade edged down. Activities of real estate agents and brokers decreased in the fourth quarter, offsetting gains in the third. These activities declined during the last four months of 2018. At year end, the output of real estate agents and brokers was 23% below levels at the end of 2017.

Support activities for mining and oil and gas extraction trended lower

Oil and gas extraction moderated in the second half of 2018 as output levels fluctuated in response to maintenance and shutdown activities. Output in the oil sands declined in four of the last six months (Chart 7). Oil sands production in December was down slightly from levels at mid-year, but about 2% higher on a year-over-year basis. Excluding production in the oil sands, oil and gas extraction in December was 7% higher year-over-year.

Output fell sharply in the second half of 2018 among businesses that provide support activities for mining and oil and gas extraction. These activities, which include rigging and drilling services, declined in five of the last six months of the year, with a 17% decline in December. Output at year end was down 23% from levels at mid-year, and 11% below levels at the end of 2017, despite gains in the first half of 2018.  

Chart 7 Real gross domestic product, selected industries

Data table for Chart 7 
Data table for Chart 7
Real gross domestic product, selected industries
Table summary
This table displays the results of Real gross domestic product Oil and gas extraction (except oil sands), Oil sands extraction, Support activities for mining and oil and gas extraction, Crude oil and other pipeline transportation and Petroleum refineries, calculated using index (January 2010=100) units of measure (appearing as column headers).
Oil and gas extraction (except oil sands) Oil sands extraction Support activities for mining and oil and gas extraction Crude oil and other pipeline transportation Petroleum refineries
index (January 2010=100)
2010
January 100.0 100.0 100.0 100.0 100.0
February 98.6 111.7 108.4 99.3 93.7
March 100.0 115.9 99.2 106.9 93.7
April 100.2 118.8 96.4 104.7 90.6
May 102.1 127.3 108.3 107.3 93.6
June 102.1 128.0 104.4 107.2 97.4
July 103.0 123.3 104.4 109.6 94.3
August 105.8 119.9 98.3 109.8 92.9
September 104.4 115.9 89.8 97.8 96.0
October 103.6 122.2 102.9 100.8 83.2
November 103.7 130.8 103.1 107.1 88.3
December 105.7 134.9 108.4 106.9 91.2
2011
January 105.7 128.7 99.1 119.3 87.3
February 103.2 130.5 98.9 125.2 86.8
March 104.8 129.0 116.1 121.0 87.8
April 105.3 133.2 113.3 116.1 89.1
May 103.9 119.2 114.4 115.4 78.1
June 102.1 128.0 114.7 117.8 82.6
July 104.9 132.7 116.7 123.1 83.3
August 107.1 135.4 137.1 129.6 86.0
September 107.5 136.6 137.1 129.7 94.2
October 106.6 133.1 136.9 129.7 90.3
November 105.1 133.3 136.1 127.1 88.5
December 105.2 134.5 132.2 129.2 87.6
2012
January 104.7 139.4 131.2 135.8 86.6
February 102.8 136.8 130.5 133.9 89.3
March 102.3 128.0 137.3 134.3 86.2
April 102.0 136.9 130.3 138.9 91.0
May 98.9 145.7 121.0 142.7 87.6
June 95.5 139.9 122.7 142.2 86.5
July 93.3 141.3 118.5 140.4 90.5
August 91.4 140.7 115.9 138.7 88.9
September 91.6 141.2 120.6 135.2 87.0
October 96.3 139.9 116.0 126.6 93.5
November 99.7 134.6 116.8 134.3 92.7
December 97.7 144.0 121.2 140.6 92.1
2013
January 98.4 140.2 131.0 141.7 93.3
February 99.3 142.4 138.0 143.7 89.1
March 100.1 147.1 131.6 146.1 90.9
April 99.6 146.2 127.8 143.7 89.0
May 101.6 138.6 123.3 141.1 80.0
June 102.4 142.5 114.6 142.6 94.0
July 103.5 143.8 120.0 139.5 88.3
August 103.9 153.8 123.1 145.6 90.8
September 103.9 151.3 126.8 145.8 94.2
October 102.6 153.6 131.0 150.3 89.0
November 103.1 159.1 122.7 148.4 94.0
December 104.5 159.4 112.4 140.8 88.9
2014
January 105.2 157.3 120.9 141.5 89.6
February 107.1 157.5 126.0 145.6 95.4
March 106.6 166.5 131.8 144.9 84.3
April 106.0 172.6 140.1 143.9 87.8
May 107.0 173.8 141.0 152.5 91.4
June 108.4 175.9 136.1 156.5 102.7
July 107.4 173.2 127.6 152.2 97.7
August 103.5 171.7 121.7 151.5 93.8
September 105.7 177.4 130.0 151.5 87.7
October 106.6 183.4 127.5 151.6 90.9
November 107.4 180.9 134.0 153.2 96.5
December 105.6 179.5 132.1 154.2 97.3
2015
January 106.0 192.0 108.0 149.6 94.5
February 105.0 197.8 95.2 154.5 92.4
March 102.3 196.2 77.2 151.0 95.6
April 101.1 191.2 78.3 162.7 96.6
May 99.0 186.3 89.6 156.9 96.8
June 98.6 197.3 99.9 160.7 88.9
July 98.2 218.8 95.2 168.8 89.5
August 98.9 221.9 100.9 177.4 94.4
September 99.1 191.2 93.8 170.6 91.6
October 97.6 203.3 95.7 164.5 92.0
November 99.1 206.3 92.4 170.4 88.4
December 99.7 207.3 84.1 175.8 92.1
2016
January 98.9 208.7 86.5 179.4 93.6
February 100.2 204.7 77.3 182.0 92.5
March 100.7 206.4 63.5 174.1 94.6
April 101.6 199.2 58.8 166.2 95.8
May 103.0 146.0 60.4 159.0 83.1
June 102.9 168.6 62.1 162.8 92.6
July 102.9 209.9 63.7 168.0 98.5
August 105.4 210.0 64.2 179.6 94.1
September 106.3 219.3 67.2 179.2 91.0
October 102.5 220.9 73.3 175.9 83.9
November 102.4 229.3 76.2 181.9 92.2
December 99.9 215.9 90.0 179.6 91.5
2017
January 102.0 218.9 89.8 178.2 91.5
February 100.5 224.5 91.3 179.7 92.7
March 104.4 214.9 92.0 179.3 95.1
April 105.2 209.5 100.1 179.7 95.9
May 108.3 225.7 95.6 186.8 98.0
June 109.4 220.8 91.4 185.6 100.1
July 108.5 224.0 89.9 193.2 97.6
August 105.2 230.8 86.3 189.9 93.5
September 108.5 227.7 85.0 192.5 100.7
October 110.1 209.3 80.8 189.4 101.4
November 109.1 225.8 84.5 175.3 96.0
December 107.9 238.3 83.8 181.7 97.5
2018
January 108.4 224.2 87.6 185.0 98.5
February 110.5 231.0 91.7 185.4 98.8
March 112.5 240.0 99.4 191.0 95.7
April 114.2 237.8 110.6 192.1 74.2
May 114.6 252.2 105.1 194.2 73.6
June 115.5 245.7 97.1 195.5 91.8
July 116.4 236.1 96.8 194.3 99.0
August 117.1 243.0 93.0 195.8 97.0
September 114.2 234.3 90.9 193.4 99.4
October 115.3 246.5 87.1 192.7 100.0
November 111.6 244.0 89.6 193.7 96.9
December 115.1 242.9 74.4 193.2 93.7
2019
January 113.7 233.0 71.5 191.0 98.2

More recently, real GDP rose 0.3% in January 2019 led by broad-based increases in manufacturing and construction. Gains in January were partly offset by lower oil and gas extraction and a continued decline in support activities for mining and oil and gas extraction.

Employment strengthened in late 2018

Total employment rose by 174,000 (+0.9%) in the last six months of 2018, led by increases among private-sector employees and core-age workers. Overall gains in the second half reflected increases in full-time and part-time work and were concentrated in services (Chart 8). Over two-thirds of the net gain in the second half reflected higher employment in British Columbia and Ontario.   

The national unemployment rate edged down to a record low of 5.6% in late 2018. Ontario’s unemployment rate averaged 5.6% during the last six months of the year, compared to 5.4% in Quebec. The unemployment rates in British Columbia and Alberta averaged 4.5% and 6.7%, respectively, during this period. 

For 2018, total employment rose by 196,000, about one-half of the increase observed in 2017.Note 8 All of the net increase was in full time-work and reflected gains among core-age workers. Higher employment among private-sector employees accounted for two-thirds of the net gain.Note 9

Chart 8 Type of employment

Data table for Chart 8 
Data table for Chart 8
Type of employment
Table summary
This table displays the results of Type of employment Total, Full-time and Part-time, calculated using year-over-year change (thousands of persons) units of measure (appearing as column headers).
Total Full-time Part-time
year-over-year change (thousands of persons)
2010
January 4.9 -67.4 72.3
February 74.7 118.4 -43.7
March 105.4 89.3 16.1
April 225.1 138.3 86.7
May 266.0 230.7 35.2
June 345.6 303.0 42.6
July 336.3 118.4 218.0
August 342.3 206.9 135.4
September 279.1 134.8 144.3
October 306.8 159.5 147.3
November 257.4 113.6 143.9
December 307.9 180.3 127.5
2011
January 315.4 209.7 105.6
February 294.9 96.4 198.5
March 305.4 260.8 44.5
April 265.0 236.1 28.9
May 232.9 193.8 39.2
June 210.2 186.6 23.6
July 238.8 382.9 -144.1
August 250.9 353.2 -102.2
September 294.5 360.4 -65.8
October 239.3 232.8 6.5
November 202.6 269.2 -66.7
December 200.8 231.2 -30.2
2012
January 121.9 190.4 -68.5
February 122.9 229.0 -106.1
March 194.0 212.3 -18.2
April 250.7 250.8 -0.1
May 246.7 225.5 21.2
June 222.6 237.4 -14.8
July 179.2 213.0 -33.9
August 200.6 203.5 -2.9
September 227.3 188.4 38.8
October 266.7 288.2 -21.4
November 301.4 253.4 48.0
December 312.1 273.2 38.8
2013
January 351.4 289.5 62.1
February 377.6 327.2 50.4
March 253.0 195.4 57.6
April 192.9 183.2 9.7
May 253.6 275.1 -21.6
June 236.1 199.9 36.3
July 255.5 159.2 96.4
August 247.4 153.5 93.8
September 216.8 167.6 49.2
October 206.6 172.5 34.1
November 183.5 136.4 47.2
December 130.9 52.4 78.5
2014
January 129.4 64.7 64.7
February 114.0 72.0 42.0
March 160.7 105.6 55.2
April 119.4 52.2 67.2
May 66.8 -70.5 137.4
June 86.2 27.5 58.6
July 123.1 22.3 100.8
August 67.3 -6.2 73.4
September 92.4 24.1 68.3
October 138.5 28.1 110.4
November 115.5 67.1 48.3
December 108.2 145.5 -37.4
2015
January 128.3 116.6 11.7
February 136.8 128.7 8.1
March 133.8 126.5 7.2
April 136.0 171.9 -35.9
May 192.2 234.8 -42.6
June 174.2 235.2 -61.0
July 168.8 273.9 -105.1
August 199.0 323.8 -124.7
September 166.3 196.5 -30.2
October 130.8 174.3 -43.5
November 127.2 202.0 -74.8
December 152.0 148.9 3.2
2016
January 119.6 164.2 -44.7
February 108.9 59.7 49.2
March 121.5 102.0 19.5
April 146.9 80.6 66.3
May 110.5 105.6 5.0
June 108.2 24.5 83.7
July 68.2 -35.6 103.8
August 98.5 -17.8 116.3
September 160.3 73.6 86.7
October 174.3 33.3 141.0
November 178.2 -31.1 209.3
December 198.3 63.6 134.7
2017
January 276.2 77.1 199.1
February 290.0 253.6 36.4
March 275.0 221.9 53.2
April 282.9 192.6 90.3
May 328.1 232.5 95.5
June 360.9 263.2 97.7
July 391.9 360.4 31.5
August 384.0 225.1 158.8
September 325.0 294.2 30.7
October 318.1 405.4 -87.3
November 384.9 440.1 -55.2
December 417.4 386.8 30.6
2018
January 276.2 429.3 -153.1
February 270.1 276.2 -6.1
March 289.7 338.3 -48.7
April 274.3 379.8 -105.5
May 223.4 283.0 -59.6
June 215.4 280.0 -64.6
July 241.0 200.4 40.6
August 167.3 323.0 -155.6
September 236.9 215.6 21.5
October 221.4 170.1 51.4
November 249.6 231.9 17.7
December 195.8 194.5 1.3
2019
January 327.2 165.6 161.7
February 369.1 266.0 103.1
March 331.6 203.7 127.8

The national employment rate—the number of employed persons expressed as a percentage of the working-age population—edged higher in late 2018, supported by higher employment among core-aged persons (those aged 25-54). The employment rate among 25 to 54 year-olds trended higher, rising to 83.3% at year end, while their unemployment rate fell below 5% from October to December (Chart 9). The employment rate among core-aged individuals in Quebec averaged 84.8% during the last six months of the year, compared to 81.8% in Ontario. In British Columbia, 84.0% of core-age persons were employed during this period, compared to 83.7% in Alberta.

Chart 9 Employment and unemployment rates, persons aged 25 to 54 years

Data table for Chart 9 
Data table for Chart 9
Employment and unemployment rates, persons aged 25 to 54 years
Table summary
This table displays the results of Employment and unemployment rates Employment rate and Unemployment rate, calculated using percent units of measure (appearing as column headers).
Employment rate Unemployment rate
percent
2010
January 80.4 7.1
February 80.4 7.1
March 80.4 7.1
April 80.6 7.0
May 80.6 6.9
June 80.7 6.9
July 80.5 7.0
August 80.5 7.0
September 80.4 7.0
October 80.4 6.6
November 80.5 6.6
December 80.5 6.5
2011
January 80.8 6.5
February 80.8 6.5
March 81.1 6.3
April 81.0 6.3
May 80.9 6.2
June 81.1 6.3
July 81.1 6.1
August 81.2 6.1
September 81.2 6.1
October 81.0 6.2
November 80.9 6.4
December 81.0 6.2
2012
January 80.9 6.3
February 81.0 6.1
March 81.0 6.2
April 81.4 6.1
May 81.4 6.2
June 81.6 5.8
July 81.4 6.0
August 81.5 5.9
September 81.7 5.9
October 81.6 6.1
November 81.7 5.9
December 81.9 5.9
2013
January 81.7 5.9
February 81.7 5.8
March 81.5 6.0
April 81.6 5.8
May 81.7 5.8
June 81.7 5.8
July 81.7 5.8
August 81.6 5.8
September 81.6 5.9
October 81.5 5.8
November 81.5 5.8
December 81.3 6.1
2014
January 81.4 5.8
February 81.4 5.9
March 81.5 5.8
April 81.1 5.8
May 81.0 5.8
June 80.9 6.0
July 80.9 6.1
August 81.1 5.8
September 81.2 5.5
October 81.4 5.5
November 81.5 5.5
December 81.5 5.4
2015
January 81.5 5.5
February 81.5 5.6
March 81.3 5.8
April 81.3 5.6
May 81.5 5.7
June 81.5 5.8
July 81.6 5.6
August 81.5 5.9
September 81.5 5.9
October 81.3 6.0
November 81.3 6.2
December 81.2 6.2
2016
January 81.3 6.2
February 81.2 6.3
March 81.3 6.1
April 81.4 6.1
May 81.4 6.0
June 81.4 5.8
July 81.3 5.8
August 81.2 5.9
September 81.3 5.8
October 81.4 5.8
November 81.6 5.9
December 81.7 5.9
2017
January 82.1 5.6
February 82.1 5.6
March 82.3 5.6
April 82.1 5.6
May 82.3 5.6
June 82.4 5.4
July 82.3 5.5
August 82.4 5.3
September 82.3 5.4
October 82.4 5.3
November 82.3 5.0
December 82.5 4.9
2018
January 82.3 5.0
February 82.5 4.9
March 82.5 4.9
April 82.6 4.9
May 82.4 5.0
June 82.5 5.1
July 82.6 5.0
August 82.5 5.2
September 82.9 5.0
October 83.0 4.9
November 83.2 4.6
December 83.3 4.7
2019
January 83.3 4.9
February 83.4 4.8
March 83.1 4.8

Employment rose during the first quarter of 2019, led by gains in full-time work and among private sector employees. Employment among core-aged workers was little changed during the quarter, as the majority of gains reflected higher employment among youth. Higher employment in Ontario accounted for about 60% of the net increase in employment in the first quarter. The unemployment rate held steady at 5.8% from January to March.

The average annual increase in payroll earnings during the last six months of 2018 was 2.3%, down from 2.9% during the first half. After reaching the 3% mark from June to August, earnings growth fluctuated in subsequent months, edging below 2% in September and again at year end (+1.7%). Earnings growth in the goods sector moderated, as payroll earnings in construction slowed towards year end.Note 10

Merchandise trade deficits widened in late 2018

Following modest deficits from August to October, Canada’s merchandise trade deficit widened in late 2018, rising to a record $4.8 billion at year end. Lower energy exports on sharp reductions in crude oil prices contributed to larger trade deficits late in the year (Chart 10).

Chart 10 Merchandise trade balance, energy and non-energy commodities

Data table for Chart 10 
Data table for Chart 10
Merchandise trade balance, energy and non-energy commodities
Table summary
This table displays the results of Merchandise trade balance Total, Energy and Non-energy, calculated using billions of dollars units of measure (appearing as column headers).
Total Energy Non-energy
billions of dollars
2010
January 0.3940 4.5516 -4.1576
February 0.0612 4.4315 -4.3703
March -1.2558 3.7750 -5.0308
April 0.1096 3.8102 -3.7006
May -0.8602 3.9468 -4.8070
June -1.3962 3.9190 -5.3152
July -2.0710 3.6363 -5.7073
August -1.7715 3.0390 -4.8105
September -2.3338 3.4017 -5.7355
October -1.1825 3.7628 -4.9453
November -0.5128 3.9555 -4.4683
December 1.1157 5.1043 -3.9886
2011
January 0.7441 5.0282 -4.2841
February -0.0485 4.6027 -4.6512
March -0.9995 4.0568 -5.0563
April -0.2397 4.5920 -4.8317
May -1.0860 4.3762 -5.4622
June -1.1145 4.4570 -5.5715
July 0.1488 4.9600 -4.8112
August 0.2088 4.7108 -4.5020
September 1.0978 5.1549 -4.0571
October -0.8401 4.7935 -5.6336
November 0.5753 5.3149 -4.7396
December 2.1211 6.3176 -4.1965
2012
January -0.0347 6.1539 -6.1886
February -0.0010 5.2140 -5.2150
March -1.1621 5.1718 -6.3339
April -0.7409 4.9959 -5.7368
May -1.3866 4.0737 -5.4603
June -2.3378 4.5044 -6.8422
July -3.0420 3.8128 -6.8548
August -1.0763 4.3878 -5.4641
September -1.0511 4.7454 -5.7965
October -0.3793 4.7582 -5.1375
November -1.6733 4.6945 -6.3678
December -0.4040 4.8585 -5.2625
2013
January -0.8826 4.6380 -5.5206
February -0.6904 5.1546 -5.8450
March -0.1831 5.4548 -5.6379
April -0.1531 5.3767 -5.5298
May -0.8204 5.5301 -6.3505
June -0.4440 5.3081 -5.7521
July -1.6565 6.0635 -7.7200
August -0.7976 6.5426 -7.3402
September -0.0351 6.8405 -6.8756
October -0.3717 6.4780 -6.8497
November -1.2676 5.8469 -7.1145
December -0.8433 6.2695 -7.1128
2014
January -0.8764 7.0811 -7.9575
February 0.5745 8.1240 -7.5495
March 1.5233 8.6208 -7.0975
April 0.3225 6.9584 -6.6359
May 0.5675 7.5547 -6.9872
June 1.6283 7.4378 -5.8095
July 1.6949 7.0638 -5.3689
August 0.9228 7.2639 -6.3411
September 0.5855 6.8634 -6.2779
October -0.1913 6.7952 -6.9865
November -0.7962 6.1013 -6.8975
December -1.2825 5.1985 -6.4810
2015
January -2.4234 4.6408 -7.0642
February -1.7219 5.1430 -6.8649
March -3.4135 4.4895 -7.9030
April -2.3809 4.4647 -6.8456
May -2.6508 4.7351 -7.3859
June -0.4176 4.9514 -5.3690
July -0.4595 4.7942 -5.2537
August -1.6078 4.2877 -5.8955
September -2.0076 4.1832 -6.1908
October -2.4134 4.1005 -6.5139
November -3.1499 3.6657 -6.8156
December -1.9895 3.4819 -5.4714
2016
January -1.3591 3.4036 -4.7627
February -3.1932 2.7842 -5.9774
March -3.2488 2.7967 -6.0455
April -3.1030 3.2194 -6.3224
May -3.6522 3.1468 -6.7990
June -3.8449 3.1083 -6.9532
July -1.4968 3.5260 -5.0228
August -1.5631 3.9994 -5.5625
September -3.9846 4.2137 -8.1983
October -1.3140 4.3895 -5.7035
November 0.9768 5.1943 -4.2175
December 0.2589 6.1102 -5.8513
2017
January -0.1487 5.4312 -5.5799
February -1.4328 5.3192 -6.7520
March -1.0704 5.9121 -6.9825
April -0.8936 5.5780 -6.4716
May -1.3712 5.7266 -7.0978
June -3.4594 4.7928 -8.2522
July -2.7101 4.7278 -7.4379
August -2.8614 5.1667 -8.0281
September -3.2947 4.7613 -8.0560
October -1.3786 5.1769 -6.5555
November -2.9417 5.3464 -8.2881
December -3.0816 5.4655 -8.5471
2018
January -1.8461 6.3015 -8.1476
February -2.3720 5.6075 -7.9795
March -3.7124 6.1342 -9.8466
April -1.5801 6.4000 -7.9801
May -2.8578 5.8849 -8.7427
June -0.7702 6.9110 -7.6812
July 0.0162 7.1579 -7.1417
August -0.3843 6.8770 -7.2613
September -0.7692 6.9446 -7.7138
October -0.6186 6.2272 -6.8458
November -2.1995 5.3106 -7.5101
December -4.8043 3.1084 -7.9127
2019
January -3.0862 5.5084 -8.5946
February -2.8948 6.3881 -9.2829

Despite larger monthly deficits late in the year, the cumulative merchandise trade deficit in the second half of 2018, at $8.8 billion, was smaller than in the first half of the year ($13.1 billion). A smaller deficit on non-energy products contributed to the decrease. For 2018, Canada’s merchandise trade deficit narrowed to $21.9 billion, down from $24.6 billion in 2017.

Total merchandise exports in the second half of 2018 were 2.3% higher than in the first six months of the year, reflecting higher shipments of non-energy products. Increases in metal ores and non-metallic minerals and consumer products contributed to higher exports, while lower exports of crude and crude bitumen offset gains (Chart 11). While the cumulative value of exports rose in the second half of 2018, monthly export flows trended lower, posting five consecutive declines from August to December. Lower energy exports contributed substantially to these declines, particularly during the last three months of the year. Energy exports in December were $6.3 billion, down from $10.0 billion in June, as exports of crude oil and crude bitumen at year end were down over 50% from levels at mid-year.      

More recently, merchandise exports rose 5.3% in January 2019, bolstered by higher crude oil prices. Despite continued support from higher crude prices in February, exports fell 1.3% on widespread declines in non-energy products.      

Chart 11 Merchandise export by commodity group

Data table for Chart 11 
Data table for Chart 11
Merchandise exports by commodity group
Table summary
This table displays the results of Merchandise exports by commodity group Total, Energy and Non-energy (appearing as column headers).
Total Energy Non-energy
2010
January 100.0 100.0 100.0
February 102.3 98.1 103.6
March 101.1 94.5 103.2
April 101.7 91.8 104.7
May 104.3 93.6 107.7
June 103.2 88.4 107.8
July 102.2 89.9 105.9
August 104.9 88.7 109.9
September 102.9 87.0 107.8
October 105.8 88.3 111.1
November 107.4 94.0 111.5
December 113.0 110.8 113.7
2011
January 116.0 114.6 116.5
February 110.2 107.2 111.2
March 112.3 111.2 112.7
April 113.8 116.1 113.1
May 113.3 114.8 112.8
June 112.2 110.4 112.8
July 116.4 111.5 118.0
August 119.7 111.6 122.2
September 123.3 120.7 124.1
October 120.8 119.4 121.3
November 124.1 127.4 123.1
December 129.2 132.2 128.3
2012
January 122.6 133.1 119.4
February 122.5 127.0 121.0
March 118.5 117.8 118.7
April 119.3 116.1 120.3
May 119.1 109.6 122.0
June 118.1 108.6 121.0
July 116.0 104.0 119.7
August 117.4 110.4 119.6
September 117.0 111.7 118.6
October 118.4 116.0 119.1
November 118.9 117.1 119.5
December 119.0 116.1 119.8
2013
January 119.3 118.5 119.6
February 122.1 121.9 122.1
March 123.8 124.7 123.5
April 125.4 123.4 126.0
May 122.5 122.0 122.7
June 122.2 121.2 122.5
July 119.5 124.3 118.0
August 125.7 138.0 122.0
September 126.9 141.2 122.5
October 124.6 132.9 122.1
November 124.1 121.8 124.9
December 125.3 133.4 122.8
2014
January 125.0 141.9 119.8
February 133.5 160.5 125.2
March 137.4 167.4 128.1
April 135.1 142.4 132.8
May 139.9 149.8 136.8
June 139.5 148.8 136.7
July 140.1 146.5 138.1
August 138.4 142.5 137.1
September 139.0 139.2 138.9
October 139.1 131.3 141.6
November 134.9 126.4 137.5
December 134.6 111.3 141.8
2015
January 130.7 95.8 141.4
February 132.4 104.2 141.1
March 133.4 97.1 144.6
April 132.6 99.2 142.9
May 131.4 99.9 141.1
June 138.6 103.0 149.6
July 140.9 98.2 154.0
August 138.4 92.1 152.6
September 137.1 88.0 152.2
October 134.0 85.1 149.1
November 133.1 80.0 149.5
December 137.6 75.7 156.6
2016
January 140.6 73.6 161.3
February 133.9 61.7 156.2
March 128.2 66.2 147.3
April 128.3 68.5 146.8
May 126.3 72.3 143.0
June 126.8 75.5 142.6
July 133.2 79.7 149.7
August 136.6 86.4 152.1
September 136.1 86.4 151.5
October 137.2 92.2 151.1
November 142.8 100.4 155.8
December 142.0 109.9 151.9
2017
January 144.1 109.5 154.8
February 141.0 110.7 150.3
March 144.5 112.6 154.3
April 145.9 110.0 157.0
May 149.9 111.9 161.7
June 141.6 98.5 154.9
July 135.2 94.4 147.8
August 135.8 97.0 147.7
September 134.9 100.4 145.5
October 138.2 104.2 148.6
November 143.1 106.6 154.3
December 144.5 114.3 153.8
2018
January 141.9 121.0 148.3
February 143.6 115.8 152.2
March 149.0 122.6 157.1
April 151.5 127.0 159.0
May 151.2 124.0 159.6
June 157.1 131.1 165.2
July 158.5 136.6 165.3
August 156.8 134.9 163.6
September 154.8 132.1 161.8
October 154.5 123.2 164.2
November 147.9 105.9 160.9
December 142.7 83.0 161.1
2019
January 150.3 109.3 162.9
February 148.3 122.1 156.4

Petroleum, chemicals and fabricated metals bolstered manufacturing sales

Total manufacturing sales in the second half of 2018 were 1.9% higher than in the first six months of the year, supported by increases in petroleum and coal products, chemical products and fabricated metals. Total sales at auto and parts manufacturers were similar in the first and second halves of the year.   

Measured on a monthly basis, manufacturing sales trended lower during the second half of 2018 on declines late in the year. Lower sales of petroleum and coal products contributed to decreases in November and December as both prices and refinery volumes declined.    

For 2018, manufacturing sales rose 5.4% supported by higher sales of petroleum and coal products, primary and fabricated metals and machinery products. Higher sales of paper products, food products and chemical products also contributed to the gain. Annual sales at auto and parts manufacturers declined in 2018, reflecting lower sales at assembly plants. More recently, manufacturing sales rose 0.8% in January 2019 on higher sales of food products, machinery and electrical equipment. Sales edged down 0.2% in February.

Slower retail sales on lower gas prices

Total retail sales were 1.4% higher in the second half of 2018 than during the first six months of the year, supported by higher sales at food and beverage stores and motor vehicle and parts dealers. Sales at general merchandise stores also contributed to the increase in retail spending, while lower receipts at gasoline stations moderated gains. Higher sales in Ontario accounted for three-quarters of the net increase in retail spending. 

Measured on a monthly basis, retail spending levelled off during the second half of 2018 as price-led declines at gasoline stations weighed on spending late in the year. Sales at auto and parts dealers bolstered sales in August, October and December, while receipts at building materials and garden equipment suppliers declined from July to November before strengthening at year end.

For 2018, retail sales rose 2.9% as auto sales moderated. Higher spending in Ontario accounted for over one-half of the annual gain. More recently, retail sales declined 0.4% in January 2019 on lower receipts at gasoline stations. Retail sales rebounded in February (+0.8%) led by higher sales at auto dealers.     

Home prices continued to soften as prices declined in Vancouver

Home prices, measured year-over-year, continued to moderate in the second half of 2018 as prices declined in Vancouver (Chart 12). Based on estimates from the Aggregate Composite MLS Home Price Index, overall home prices were 1.6% higher at year end than at the end of 2017. Price growth continued to moderate in early 2019, slowing to 0.8% in January before declining on a year-over-year basis in February and March.Note 11

Home prices in Greater Vancouver softened during the second half of 2018 as prices declined month-over-month from July to December. Measured on a year-over-year basis, price growth in Greater Vancouver slowed from 9.5% in June to 1.0% in October prior to outright declines in November and December. Home prices in Greater Vancouver continued to decline on a year-over-year basis in early 2019, and were down 7.7% in March. 

After declines from March to July, home prices in Greater Toronto edged higher on a year-over-year basis during the second half of 2018, rising to 3.0% at year end. Annual price increases in Greater Toronto moderated slightly in early 2019, before edging up to 2.6% in March. Meanwhile, annual home price inflation in Montreal has been around 6% during the second half of 2018, and continued at this pace into early 2019. 

Chart 12 MLS home price index, selected cities

Data table for Chart 12 
Data table for Chart 12
Multiple listing service (MLS) home price index, selected cities
Table summary
This table displays the results of Multiple listing service (MLS) home price index Aggregate, Greater Vancouver , Calgary , Greater Toronto and Greater Montreal, calculated using index (January 2010=100) units of measure (appearing as column headers).
Aggregate Greater Vancouver Calgary Greater Toronto Greater Montreal
index (January 2010=100)
2010
January 100.0 100.0 100.0 100.0 100.0
February 101.3 101.1 101.4 101.4 101.6
March 102.5 102.4 103.0 102.6 102.8
April 103.1 103.2 103.7 103.3 103.7
May 103.3 103.0 104.4 103.3 104.3
June 103.0 102.6 104.4 102.8 104.8
July 102.5 101.5 103.7 102.1 105.1
August 102.0 100.9 102.3 101.8 105.4
September 101.8 100.6 101.3 101.9 105.5
October 101.6 100.4 100.3 102.0 105.7
November 101.5 100.6 99.4 102.4 106.0
December 101.4 100.5 98.8 102.9 106.4
2011
January 102.0 101.6 98.4 103.7 107.2
February 103.0 102.5 99.0 105.4 108.4
March 104.2 104.4 99.5 106.5 109.3
April 105.2 106.7 100.1 107.6 109.8
May 105.9 107.8 100.5 108.7 109.9
June 106.2 108.5 101.2 109.0 109.8
July 106.5 108.9 101.1 109.5 109.8
August 106.6 109.1 100.8 110.1 110.1
September 106.6 108.7 100.3 110.4 110.1
October 106.6 108.4 99.8 110.9 110.4
November 106.4 108.1 99.4 111.2 110.1
December 106.2 107.5 98.6 111.6 108.9
2012
January 106.6 107.7 98.4 111.9 109.6
February 107.5 108.7 99.1 113.3 110.1
March 108.8 110.0 99.9 115.1 111.6
April 109.9 110.7 100.8 116.4 112.4
May 110.6 111.2 101.9 117.5 112.6
June 110.8 110.4 102.6 117.7 113.0
July 110.6 109.5 102.9 117.3 112.6
August 110.5 108.4 102.9 117.1 112.6
September 110.3 107.8 103.0 117.1 112.7
October 110.0 107.3 102.7 116.9 112.6
November 109.6 106.4 102.6 116.6 112.2
December 109.3 105.3 102.5 116.3 112.3
2013
January 109.7 104.9 103.0 116.2 112.5
February 110.5 105.3 104.0 117.0 113.3
March 111.6 105.8 105.1 118.6 114.2
April 112.7 106.7 106.5 119.9 114.6
May 113.6 106.6 107.6 121.0 116.4
June 113.9 107.3 108.3 121.5 115.6
July 114.1 107.3 109.0 121.6 115.4
August 114.2 107.2 109.4 121.8 115.3
September 114.4 107.4 109.8 122.1 115.3
October 114.5 107.2 111.0 122.4 115.2
November 114.7 107.6 111.6 123.2 115.1
December 114.6 107.5 112.0 123.4 114.8
2014
January 114.9 108.2 112.6 124.4 114.6
February 116.1 108.9 114.0 125.6 116.1
March 117.3 109.9 115.5 127.2 116.4
April 118.4 110.6 117.2 128.5 116.4
May 119.4 111.6 119.0 129.6 116.5
June 120.0 112.1 120.2 130.9 116.5
July 120.2 112.2 120.7 131.2 116.0
August 120.2 112.6 121.1 131.0 115.6
September 120.4 113.0 121.5 131.3 115.4
October 120.7 113.6 121.8 132.1 115.6
November 120.8 113.8 121.6 132.7 115.4
December 120.9 114.1 121.5 133.0 115.1
2015
January 121.1 114.5 121.8 133.5 115.2
February 122.1 115.9 121.4 135.2 115.8
March 123.5 118.0 121.1 137.2 116.9
April 124.7 120.0 120.2 139.4 117.5
May 125.7 122.1 120.2 141.2 117.5
June 126.7 123.7 120.6 142.7 117.8
July 127.2 124.9 120.5 143.6 118.0
August 127.5 126.4 120.5 144.1 117.3
September 128.1 128.7 120.5 145.0 117.1
October 128.4 130.9 120.0 145.5 117.1
November 129.1 133.9 119.4 146.1 117.1
December 129.2 135.5 118.6 146.5 117.2
2016
January 130.1 138.1 117.7 147.1 116.8
February 132.0 142.2 117.0 149.8 117.7
March 134.4 145.9 116.2 153.2 118.7
April 137.1 151.1 115.9 157.0 119.2
May 140.8 158.6 115.7 162.2 119.7
June 143.1 163.5 115.9 165.1 120.0
July 144.5 165.7 115.8 167.0 120.0
August 145.5 166.2 115.8 168.7 120.3
September 146.3 165.3 115.8 170.8 120.1
October 147.2 163.9 115.6 173.9 120.2
November 147.6 162.3 115.0 175.3 120.6
December 147.9 160.1 114.8 177.0 121.0
2017
January 149.9 160.0 114.7 180.4 121.2
February 153.0 161.8 114.5 186.0 121.6
March 158.8 164.7 114.8 197.3 122.9
April 163.5 168.7 115.1 206.4 123.8
May 165.1 173.3 116.1 208.5 124.2
June 164.9 176.6 116.6 206.9 124.8
July 162.2 180.3 117.0 197.3 125.8
August 160.8 182.0 116.8 192.8 125.8
September 160.9 183.2 116.5 191.9 126.3
October 160.6 183.9 115.9 190.9 127.0
November 160.3 184.8 115.2 190.1 127.1
December 160.4 185.6 114.3 189.8 127.6
2018
January 160.9 186.8 114.1 189.7 127.4
February 162.8 189.4 114.7 191.9 129.0
March 164.8 191.6 115.2 194.2 130.4
April 165.8 192.8 115.2 195.6 131.6
May 166.8 193.2 115.4 197.1 132.5
June 166.5 193.2 115.4 197.1 132.9
July 166.0 192.2 115.1 196.1 132.9
August 165.1 189.5 114.1 195.6 133.1
September 164.6 187.3 113.4 195.7 134.0
October 164.4 185.8 112.9 196.0 134.9
November 163.6 182.3 111.9 195.3 135.0
December 162.9 180.6 110.7 195.4 135.2
2019
January 162.2 178.4 109.7 194.8 135.5
February 162.7 177.8 109.6 196.4 137.0
March 164.0 176.9 109.5 199.2 138.7

Monthly housing starts averaged 207,000 units (seasonally adjusted an annual rates) during the second half of 2018, down from 221,000 in the first six months of the year. Average starts in Ontario and Quebec edged down in the second half. Ground-breaking on new homes in Quebec declined in the third quarter on lower apartment starts, before rebounding in the fourth. Urban single-detached starts in Ontario continued to edge lower during the second half of the year, while ground-breaking on multi-family units rose in the fourth quarter on increases in Toronto. More recently, average housing starts slowed to 187,000 annualized units in the first quarter of 2019.

Residential building permits edged lower during the second half 2018. Permits in the second half totalled $30.8 billion, down from $32.0 billion in the first. Lower permits for single-detached dwellings accounted for the decline.

Headline consumer inflation slowed on declines in gasoline prices

After rising to 3.0% in July, consumer price inflation moderated in the second half of 2018, slowing to 1.7% in November before edging up to 2.0% at year end. Changes in gasoline prices along with transitory changes in the prices for air transportation and travel tours contributed to movements in the headline rate.

Gasoline prices, measured year-over-year, moderated sharply in the second half of 2018, as annual price increases slowed from 25% at mid-year to 12% in October. Gasoline prices declined on a year-over-year basis late in the year and were down 8.6% in December. Higher prices for air transportation and travel tours contributed to increases in the headline rate during the summer months and again in December. In these months, the services index rose above 3% on a year-over-year basis. Food prices, measured year-over-year, increased towards year end, accelerating to 2.9% in December.

The homeowners’ replacement cost index, which in part reflects changes in new housing prices, moderated in the second half of the year, slowing to 0.2% at year end. In contrast, the mortgage interest cost index continued to increase during the second half of 2018. Mortgage interest costs in December were 7.5% higher on a year-over-year basis.

All of the Bank of Canada’s preferred measures of core inflation (CPI-common CPI-trim, and CPI-median) edged below the 2% mark in late 2018. At year end, the three core measures ranged from 1.8% to 1.9%.Note 12

Movements in headline consumer inflation tracked year-over-year changes in average weekly earnings during the second half of 2018, as both slowed towards the end of the year following larger increases in the summer months. More recently, headline consumer inflation decelerated to 1.4% in January 2019 on downward pressure from lower gas prices. Consumer inflation edged up to 1.5% in February before accelerating to 1.9% in March.

Equities declined on broad-based losses

Toronto stock prices (S&P/TSX composite index) fell sharply in the second half of 2018, following little net change over the first six months of the year. The composite index closed at 14,323 at year end, down 12% from June, following sizable losses in the fourth quarter. The Canadian energy index fell by 33% in the second half, posting double-digit losses in October and November. Financials, industrials and consumer discretionary stocks also posted losses in the second half, reflecting large declines in December. The gold index strengthened towards year end, following declines in the third quarter.   

More recently, the S&P/TSX composite index rose by 9% in January and 3% in February as energy, financial, industrial and consumer stocks strengthened. Equity prices continued to increase in March, as the composite index closed at 16,102 at month end.       

Borrowing costs increased as the debt service ratio edged higher

Yields on benchmark Government of Canada five-year bonds rose from July to October, before edging lower late in the year. Five-year yields were at 1.93% at year end, down from a recent high of 2.42% in October. The spread between two- and ten-year yields narrowed late in 2018 as ten-year yields edged below 2%.

In October, the Bank of Canada raised the target for the overnight rate by 25 basis points to 1.75%, following a 25 basis point increase in July. October’s increase marked the fifth increase since mid-2017. Canada’s major banks announced on October 24th that they had increased their prime lending rates by a further 25 basis points to 3.95%.

The debt service ratio for the household sector—the total obligated payments of principal and interest on household credit market debt as a share of disposable income—continued to edge higher during the second half of 2018. The debt service ratio rose to 14.9% in the fourth quarter after increasing to 14.7% in the third. As of the fourth quarter, the household debt service ratio was at its highest level since the last quarter of 2007.

Commodity prices fell as the dollar weakened

The value of the Canadian dollar trended lower in the second half of 2018, as offsetting movements in the third quarter gave way to declines in the fourth. After trading as high as 78.1 cents U.S. at the start of October, the dollar depreciated towards year end, closing at 73.3 cents U.S. at the end of December.Note 13 More recently, the Canadian dollar strengthened in early 2019, trading at 76.1 cents U.S. at the end of January. The dollar trended lower during February and March, closing at 74.8 cents U.S. at the end of the first quarter.   

Commodity prices declined during the second half of 2018, offsetting gains earlier in the year. Commodity prices at year end were down 19% from levels at mid-year. Declines were-broad based across commodities, as prices for energy, metals and minerals, agricultural products and forestry products all fell.

Overall, commodity prices at year end were down 7% from price levels at the end of 2017. More recently, commodity prices advanced from January to March, led by a 16% increase in energy prices.

Lower household wealth on declines in equities and housing

The net worth of households fell 2.8% in the fourth quarter after edging down (-0.2%) in the third (Chart 13). The decline in late 2018 was the largest quarterly decrease in household net worth in ten years. The value of household equity and investment funds assets was down 7.5% in the fourth quarter, while lower values for residential real estate also detracted from household net worth. Total household assets at the end of 2018 were valued at $12.98 trillion, while total financial liabilities amounted to $2.24 trillion.

Chart 13 Change in household net worth

Data table for Chart 13 
Data table for Chart 13
Change in household net worth
Table summary
This table displays the results of Change in household net worth Net worth, Non-financial assets, Financial assets and Financial liabilities, calculated using billions of dollars units of measure (appearing as column headers).
Net worth Non-financial assets Financial assets Financial liabilities
billions of dollars
2010
First quarter 140.2 87.3 63.6 -10.8
Second quarter -2.1 62.0 -30.3 -33.7
Third quarter 226.7 35.7 212.3 -21.3
Fourth quarter 165.8 49.0 138.7 -21.9
2011
First quarter 200.7 91.8 111.1 -2.1
Second quarter 86.2 85.9 32.2 -31.9
Third quarter -58.4 72.6 -106.1 -24.9
Fourth quarter 135.8 48.3 109.5 -22.1
2012
First quarter 243.9 102.7 146.2 -5.1
Second quarter 62.5 98.8 -10.0 -26.3
Third quarter 176.3 58.1 142.7 -24.5
Fourth quarter 119.4 38.8 93.5 -12.9
2013
First quarter 208.0 70.7 147.4 -10.2
Second quarter -7.8 87.8 -70.6 -25.0
Third quarter 166.9 89.9 102.7 -25.6
Fourth quarter 262.5 63.7 214.0 -15.1
2014
First quarter 240.1 71.2 175.7 -6.9
Second quarter 216.4 96.3 147.6 -27.5
Third quarter 97.7 60.5 65.8 -28.6
Fourth quarter 158.2 44.3 130.0 -16.1
2015
First quarter 279.5 53.3 237.0 -10.7
Second quarter 22.8 105.4 -46.8 -35.8
Third quarter -13.4 86.2 -67.7 -31.8
Fourth quarter 204.2 118.7 108.1 -22.6
2016
First quarter 185.6 142.9 56.3 -13.7
Second quarter 202.2 85.6 155.9 -39.3
Third quarter 245.9 65.9 208.3 -28.3
Fourth quarter 135.2 118.6 41.1 -24.4
2017
First quarter 261.0 142.0 130.6 -11.6
Second quarter 38.7 18.8 59.6 -39.8
Third quarter -9.9 9.3 9.8 -28.9
Fourth quarter 232.7 52.6 202.9 -22.8
2018
First quarter 65.1 72.0 -0.8 -6.1
Second quarter 101.4 28.6 105.0 -32.2
Third quarter -17.8 -24.0 31.2 -25.0
Fourth quarter -304.3 -60.8 -224.4 -19.0

After slowing during the first two quarters of 2018, household borrowing edged higher during the second half of the year.Note 14 Total credit market borrowing among households—which includes mortgage loans, non-mortgage loans, and consumer credit—was $21.2 billion in the fourth quarter, up from $20.9 billion in the third. All of the increase late in the year reflected higher mortgage borrowing, which rose to $12.3 billion. Nonetheless, mortgage borrowing in the fourth quarter remained over 20% below levels in late 2017, before the new minimum qualifying rate for uninsured mortgages took effect in January 2018.  

The ratio of household credit market debt to disposable income, measured on a seasonally-adjusted basis, rose to 178.5% in the fourth quarter, while the household debt-to-asset ratio edged up to 17.3%. While the debt-to-asset ratio rose in both the third and fourth quarters, it has generally trended lower since the 2008-2009 recession.

References

Gellatly, G. and R. Morissette. 2017. Non-resident Ownership of Residential Properties in Toronto and Vancouver: Initial data from the Canadian Housing Statistics Program. Economic Insights, no. 78. Statistics Canada Catalogue no. 11-626-X. Ottawa Statistics Canada.

Gellatly, G. and R. Morissette. 2018. Immigrant Ownership of Residential Properties in Toronto and Vancouver. Economic Insights, no. 87. Statistics Canada Catalogue no. 11-626-X. Ottawa Statistics Canada.

Gellatly, G. and E. Richards. 2018. Recent Developments in the Canadian Economy: Fall 2018. Economic Insights, no. 85. Statistics Canada Catalogue no. 11-626-X. Ottawa Statistics Canada.

Gellatly, G. and E. Richards. 2019. Indebtedness and Wealth Among Canadian Households. Economic Insights, no. 89. Statistics Canada Catalogue no. 11-626-X. Ottawa Statistics Canada.

Heisz, A. and E. Richards. 2019. Economic Well-being Across Generations of Young Canadians. Are Millennials Better or Worse Off? Economic Insights, no. 92. Statistics Canada Catalogue no. 11-626-X. Ottawa Statistics Canada.

Patterson, M. M. Hazel and D. Saunders. 2019. Annual review of the labour market, 2018. Labour Statistics: Research Papers. Catalogue no. 75-004-M-2019002. Ottawa: Statistics Canada.

Statistics Canada. Bank of Canada’s preferred measures of core inflation. Last updated November 18, 2016. (accessed March 22, 2016). Available at: http://www23.statcan.gc.ca/imdb-bmdi/document/2301_D63_T9_V1-eng.htm (accessed March 22, 2016).


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