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Real gross domestic product grew 0.1% in September after declining 0.5% in August (revised from a 0.3% decline) following a 0.7% increase in July. In September, the increase in the output of the service industries outweighed the decrease in the production of goods. More than 40% of the gain in the service industries was attributable to wholesale trade. There were also increases in retail trade, the public sector, and manufacturing. Notable decreases were recorded in oil and gas extraction, construction, forestry and tourism-related industries.
Chart C.1 Economic activity edges up
Wholesaling activity went up 1.6% in September. There was a notable increase in the wholesaling of automotive products, grains, petroleum products and building supplies. Conversely, the volume of activity of wholesalers of metal products decreased.
Chart C.2 Wholesale trade increases
Output of the energy sector decreased 0.9% in September. Oil and gas extraction fell 1.6% due to the decline in both components. Supply disruptions partly hampered oil production.
Support activities for mining and oil and gas extraction went up for a fifth consecutive month in September (+1.2%), largely due to the strength of drilling and rigging services.
The output of the mining sector excluding oil and gas retreated 0.7% in September. The decline in metal ore mines more than offset the rise in output of non-metal mines.
Manufacturing production advanced 0.3% in September, with 16 of the 21 major groups increasing. In particular, machinery, food, and petroleum and coal products increased, while primary metal and chemical manufacturing declined. Motor vehicle production continued its downward trend that started at the end of 2007.
Value added in retail trade grew 0.4% in September, a fifth increase in the last six months. This gain was due to a substantial rise in the volume of activities at new car dealers, as all the other store types together recorded no growth. A rise in the activities of used car dealers and general merchandise stores (which include department stores) eclipsed the decreases recorded by furniture, home furnishings and home electronics stores, gasoline stations, and home centres and hardware stores.
The finance and insurance sector edged up 0.1% in September. The increase in activity resulting from the record volume of trading on the stock exchanges was virtually offset by the steep decline in mutual fund sales. Output of the non-depository credit intermediation and insurance industries declined as the global devaluation of assets reduced the revenues from management of mortgages and other portfolio investments.
The construction sector fell 0.4% in September. All types of construction work (residential and non-residential building, and engineering and repair work) decreased. In residential building construction, multi-unit structures advanced, while single-family and alterations and improvements work lost ground. Single-family dwelling construction has been trending downward since the Fall of 2007. Construction of commercial, industrial and institutional buildings decreased in September, adding to the downward trend.
The output of real estate agents and brokers increased in September, reflecting a significant rise in sales of existing homes across the country. In particular, the number of homes sold in the low and middle price ranges was significant.
Canadian economic activity, as measured by real gross domestic product at basic prices, grew 0.4% in the third quarter of 2008, after remaining essentially flat in the first half of the year.
After four consecutive quarterly declines, the production of goods grew by 0.5% in the third quarter, led by increases in the mining sector, notably in support activities for oil and gas extraction, as well as in construction. The manufacturing sector edged up while forestry continued its decline. Production in the services industries was up 0.4%, with notable gains in the public sector and, to a lesser extent, in retail trade and wholesale trade. Conversely, the finance and insurance sector as well as accommodation and food services retreated.
The energy sector rebounded in the third quarter on the strength of a particularly robust July, which saw significant increases in the extraction of both petroleum and natural gas. Exports of both crude oil and natural gas, however, declined for a second consecutive quarter. Support activities for mining and oil and gas extraction advanced consistently throughout the third quarter, which resulted in a 15.5% increase over the previous quarter. Mining, excluding oil and gas, rose for a second quarter in a row, primarily as a result of an increase in metal ore minerals production.
The public sector continued to advance, with all three major components (public administration, health and social services, and education) posting gains. Value added in retail trade moved forward 0.3%, on the strength of the volume of activity at home electronics stores, general merchandise stores, and used cars dealers. Reduced volume of activity at new car dealers hampered this sector during the quarter. Wholesale trade activities continued to rise, driven by machinery and equipment, miscellaneous wholesalers (such as chemicals, paper, agricultural products, etc.) and new motor vehicles.
The third quarter of 2008 saw value added in manufacturing end a string of four quarterly declines, edging up 0.2%. This was the result of a significant increase in the production and smelting of primary metal products. Excluding the primary metal industry, manufacturing fell 0.4% in the third quarter. Some of the most export-oriented sub-sectors, such as wood products, motor vehicles and associated parts manufacturing, continued to decrease.
Construction continued to advance in the third quarter, on the strength of engineering and repair construction work. While the construction of non-residential buildings fell for the second consecutive quarter, residential construction increased slightly, as a decline in new single dwellings nearly erased the growth in other types of residential projects. Activity of real estate agents and brokers dropped for a fifth consecutive quarter as the home resale market softened further after peaking around the middle of 2007.
The forestry and logging sector fell 8.1%, a continuation of a downward trend that started in the fourth quarter of 2005. This sector continued to be affected by lower foreign demand. The finance and insurance sector posted its first quarterly decline (-0.1%) in four years, due to a decrease in the volume of activities of insurance carriers and security traders.
Information on methods and data quality available in the Integrated Meta Data Base: 1301.