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Provincial and Territorial Economic Accounts Review

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2008 Preliminary Estimates

Overview

Real gross domestic product (GDP) increased 0.5% nationally in 2008, a deceleration in growth from the 2.7% gain in 2007. Economic output seesawed during the first seven months of the year, and then contracted each month from August through December as global demand and commodity prices faltered amid turmoil in global financial markets.

Chart 1 Real gross domestic product, 2008
Chart 1 Real gross domestic product, 2008

The year was marked by a downturn in exports, the first decline since 2003. Trade of manufactured goods, particularly related to forestry and automotive products were hard hit. Domestic demand grew at a slower pace than 2007, as growth of personal spending decelerated and housing construction declined.

Business investment in non-residential structures and machinery and equipment increased slightly. Corporate profits were up as commodity prices, particularly in the first part of the year, were high.

Output in most goods producing industries was down in 2008 with manufacturing and forestry strongly affected. Growth in services industries generally slowed.

GDP growth in five provinces and two territories surpassed that of the national economy. These regions tended to have strong growth in their construction industry or enough personal or government expenditures to overcome a general weakness in the export market.

GDP in Saskatchewan surged in 2008, advancing 4.4%. A bumper crop along with a construction boom fuelled the expansion. The Manitoba economy increased 2.4%, recording a deceleration of growth over the past two years. Personal and government spending helped the economies of Nova Scotia and Prince Edward Island to grow more rapidly than the national economy. Despite a downturn in manufacturing, Quebec stayed above the national growth rate as businesses continued to invest in non-residential structures.

Nunavut’s economy benefited from mine construction while the Yukon economy continued to be spurred by copper production.

Ontario was impacted by a large downturn in automotive and related manufacturing. Growth in Newfoundland and Labrador as well as in Alberta was dampened by decreases in the production of oil and gas. Alberta was further affected by a downturn in manufacturing. Growth in British Columbia and New Brunswick was hindered by a downturn in forestry and its related manufacturing processes. A downturn in diamond mining held back the economy of the Northwest Territories.