Gross domestic product by industry

March 2007

Economic activity increased 0.3% in March, after growing 0.4% in February and 0.1% in January. Strength in service industries (+0.5%) more than offset a decrease in the production of goods (-0.2%). Wholesale and retail trade experienced robust growth during the month. Gains were also registered in construction, manufacturing and the financial sector. These increases were partially offset by declines in agriculture, forestry, the energy sector and mining, excluding oil and gas.

Chart C.1 Economic activity moves ahead

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Strong wholesale and retail trade

Wholesale trade jumped 1.8% in March, owing largely to strong trade in motor vehicles. The surge in motor vehicle sales was in line with a significant rise in passenger vehicle exports to the United States. Noticeable gains were also recorded for building supplies, machinery and equipment, and metal products. These three trade groups benefited from strong activity in the construction sector. However, computer and other electronic equipment, household and personal products, and petroleum products, all declined.

Retail trade rose sharply (+1.4%) in March, following a drop the month before. This increase was fuelled primarily by sales of new cars. Additional momentum came from clothing, home electronics, and sporting goods stores. Sales by gasoline stations were the main source of weakness in retail trade.

Chart C.2 Retailers and wholesalers show strong growth

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Construction edges up

The construction sector rose 0.1% in March. The continued strength in non-residential construction (+1.1%), and the increase in engineering and repair work (+0.2%), overshadowed the 0.6% decline in residential construction. There was strength in all types of non-residential buildings. The decrease in residential construction was the result of the ongoing decline in single-family homes and the slip in apartment output. However, alterations and improvement work moved forward.

The home resale market slipped for the first time in seven months. This reversal resulted in a 0.2 % decline in the real estate agents and brokers industry.

Chart C.3 Main industrial sectors' contribution to total growth

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Manufacturing activity advances

The manufacturing sector advanced 0.8% as both durable (+1.0%) and non-durable goods manufacturing (+0.4%) rose. Of the 21 major manufacturing groups, 16 increased, accounting for 80% of the total manufacturing value added.

Motor vehicle manufacturing was robust in March, increasing 3.5%. Significant gains in the manufacturing of computer and peripherals (+3.9%), semiconductors and electronics (+6.4%), and resin, synthetic rubber and fibre (+4.8%), also helped the sector. However, declines were recorded in sawmills and food product manufacturing.

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Energy sector falls

The energy sector fell 1.7% in March, following two months of strong growth. This setback was due to a fall in natural gas extraction and the tumble in oil and gas exploration (-12.5%). This decline was in line with a drop in natural gas exports to the United States. Petroleum extraction increased however. Utilities also recorded a significant decline (-1.4%).

The output of the mining sector, excluding oil and gas, fell 1.3%. The drop registered in metal ore mines was only partly mitigated by gains in non-metallic mineral mines. A strike in iron ore processing was the primary cause of the slump in metal ore mining.

Industrial production (the output of mines, utilities and factories) retreated 0.2% in March. The drop in mining and the decline in utilities outweighed the gains made by manufacturers. In comparison, industrial production in the United States decreased 0.3% in March, due to the tumble in utilities, while manufacturing and mining both advanced.

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Banking and brokerage activities advance

Output in the finance and insurance sector grew 0.7%. This gain was largely propelled by healthy trading activity in the financial markets.

Other industries

The accommodation and air transportation industries both edged forward in March (+0.4%). The number of overnight visitors to Canada from abroad was up 1.1% compared to February.

The end of the strike by rail employees led to a 4.3% increase in output of the rail transportation industry.

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First quarter 2007

Economic activity grew at a much faster pace in the first quarter of 2007 than in the last quarter of 2006. Both the service sector (+1.0%) and goods production (+0.9%) increased. The growth in the production of goods followed three quarters of decline. Growth came mainly from the energy sector, wholesale and retail trade, the financial sector and construction. Agriculture, forestry and mining, excluding oil and natural gas, also posted gains. However, these gains were partly offset by declines in accommodation services, and arts and entertainment. Manufacturing remained unchanged after declining for four straight quarters.

The energy sector increased 1.9%. Much of the growth was in electricity production, and oil and natural gas extraction, which erased the declines recorded in the previous quarter due to warm weather and production difficulties. Oil and gas exploration was nearly unchanged (-0.4%) after declining 16% in the previous quarter.

Wholesale trade leaped 2.4% in the first quarter largely due to a rebound in sales of motor vehicles. Building materials as well as computers and other electronic equipment, also contributed to the increase. Conversely, office and professional equipment, declined. Retail trade advanced 1.1% despite a decrease in new car sales.

The finance, insurance and real estate sector advanced 1.2% due to the strength of banking, brokerage and insurance activities. Stockbrokers’ activities grew 3.0% due to healthy trading on the markets. Real estate agents and brokers posted a robust gain (+5.4%), as a result of a very active home resale market in December 2006 and January 2007.

Construction activities grew 1.1% in the first quarter of 2007. Construction last posted a decline in the third quarter of 2000. All types of construction activities increased, with engineering and repair work leading within this sector. Residential construction advanced during the quarter largely because of increased alterations and improvements work.

Manufacturing activities remained essentially unchanged in the first quarter, after declining for four straight quarters. Of the 21 major groups, 14 posted gains, accounting for 68% of total manufacturing value added. The production of durables grew 0.7%, while non-durables declined 0.9%. The drop in non-durables is the sixth consecutive quarterly decline.

Industrial production (the output of utilities, mines and factories) edged forward 0.7%. Mining, oil and gas as well as utilities posted significant gains, while manufacturing was stagnant. Industrial production in the United States edged up (+0.2%) as manufacturers and utilities posted gains and mining receded.

The accommodation industry suffered a dismal quarter due to the poor climatic conditions which were not conducive to winter tourism. Despite the weather, restaurants and air transportation managed to post gains.

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Statistical tables

• Table C.1 Real gross domestic product by industry, at basic prices, monthly
• Table C.2 Real gross domestic product by industry, at basic prices, quarterly and annually

Information on methods and data quality available in the Integrated Meta Data Base: 1301.