15-001-XIE
Gross Domestic Product by Industry
March 2001 |
Gross Domestic Product (GDP) edged up 0.1% in March, offsetting a similar-sized decline in February.
Manufacturing was buoyed by higher output of automotive and pharmaceutical goods, and by a pause in the sharp contraction experienced by electronic equipment makers. The mining sector continued to gain ground, spurred by increased activity in the oil patch. These gains were partly offset by modest declines in the output of utilities and communications companies, as well as by a drop in the forestry sector. GDP in the wholesaling and retailing industries was little changed in March.
Higher auto production helped lift manufacturing
Total factory output rose 0.5% in March after a four-month string of declines. An increase in the output of automotive products, the most significant in ten months, and continued growth at plants making pharmaceutical products, were primarily responsible for the increase in output, and together accounted for almost all of the overall increase in output. Despite the March gain, manufacturing output has contracted 2.3% since its most recent peak in October 2000.
March was also noteworthy for a modest gain by makers of electronic products, the first positive movement after a precipitous series of declines that began in November. Overall, the output of twelve of twenty-two industries, representing almost 70% of total manufacturing output, rose in March. Weakness in manufacturing came from makers of wood products, paper & allied products and machinery.
Automotive production rose 1.9% in March, after slumping consumer demand led to a series of cutbacks beginning in the second half of 2000. While exports of passenger automobiles edged down slightly, exports of trucks rose a substantial 6.0%. The production and export of parts also rose in March, in tandem with a significant increase in auto production in the United States.
Manufacturers of pharmaceutical products were behind a 2.5% increase in chemical production in March. The industry has increased plant capacity to satisfy rising domestic and export demand, resulting in exceptionally strong growth in the last few months that has helped bring output 43% above March 2000 levels.
Production of electronic products rose a modest 0.8% in March, the first increase since October 2000, when the industry took a tumble as major clients scaled back their spending plans. Output of such goods as communications-related components and parts, computers & peripherals and fibre optic equipment either rose or was stable. Production of telecommunications equipment fell for the seventh time in as many months. The decrease, however, at 1.9%, was a far cry from the double-digit declines of the two previous months. Despite the latest monthly increase, overall production of electrical & electronic equipment was 15.8% lower than in October 2000, the industry's most recent peak.
The last month of the quota-based Canada-US Softwood Lumber Agreement saw exports of lumber fall 11.8% in March. The output of sawmills dropped 10.6%, the largest monthly decline in almost 15 years. A combination of fulfilled quota and uncertainty concerning pricing crimped production activity.
Oil patch continued to buoy mining sector
Mining sector output rose 0.8% in March, the fifth increase in seven months. As in previous months, the industry's upward progression was supported by the expansion of oil & gas extraction, where production has increased in recent months in response to strong demand and prices. Rigging and exploration activity was on the upswing in March, lifting the industry to a cyclical high. A drop in the iron mine industry that was to some extent induced by labour strife partially offset these gains, as did a decline in diamond mining.
Little change for retailers and wholesalers
Wholesaling activity was little changed in March, a modest gain by distributors of computers & software and automotive products being offset by decreases at sellers of building materials, food products and newsprint.
Retail sales activity edged up 0.3% in March, as sales at auto dealers' lots picked up when consumers took advantage of renewed use of dealer incentives. The March increase in auto sales did not fully offset a larger decline in February, however. Furniture store sales also rose in March, paralleling the steady growth in demand for housing. These increases were partly offset by declining sales in grocery stores and stores that specialize in auto parts.
Other industries
Financial market uncertainty dragged down March mutual fund sales both from a year earlier and from an RRSP-stimulated February, leaving the finance industries virtually flat. After rising in six of the previous eight months, construction activity edged down in March. Both residential and non-residential building projects showed little change, while repair & engineering construction fell for a third consecutive month.
Railway transportation was held back by fewer carloadings of wheat and iron ore. After recording four months of solid growth, output in the telephone carrier industry fell back 0.4% in March. The previous months' progression had been mostly stimulated by the expanding use of cellular telecommunication services.
First Quarter, 2001
A second consecutive decline in manufacturing output held the economy to a 0.3% gain in the first quarter of 2001, the smallest increase in five years.
Strength in oil & gas, construction and most service industries (including retailing, wholesaling, communications, real estate and government services) underpinned economic growth in the first quarter. Weakness in the manufacturing sector was concentrated in the production of automotive and electronic products. Excluding these two industrial groups, which accounted for only 4.3% of total output, production in the rest of the economy in the first quarter was up a more substantial 0.7%.
Manufacturing sank deeper in the first quarter
The slump in factory output became more pronounced in the first quarter, a 1.6% decline following a 0.5% drop in the fourth quarter. In addition to weakness in the automotive and electronics industries, output of paper and plastic products was also curtailed. Thirteen of twenty-two major industry groups, representing 57% of total manufacturing output, cut production in the first quarter. There were notable increases in output in the chemical and fabricated metal product industries.
The effects of the world-wide slump in demand for telecommunications equipment were more pronounced than ever in the first quarter, leading manufacturers of electrical & electronic products to cut production by 11.8%, the largest quarterly drop since 1961, the year statistics for this industry were first compiled. While lower production of telecommunications equipment accounted for the bulk of the decline, manufacturers of other electronic parts & components, fibre optic equipment and computers & peripherals were also caught in the downdraft.
The first quarter saw a 4.9% decline in automotive production, as efforts to whittle down bloated inventories had producers slamming the brakes on production for a second consecutive quarter. Output of motor vehicles fell 6.2% in the first quarter (after a 6.8% drop in the previous quarter), while production of automobile parts & accessories dropped 4.1% (following a 6.0% decline). These movements mirrored lower exports of cars and trucks to the United States, the destination of 9 out of every 10 motor vehicles manufactured in Canada. The cumulative effect of the auto industry's retrenchment has been significant: overall, output of automotive goods in the first quarter of 2001 was 12.5% below the production levels of the same period one year ago.
The auto industry's travails were also having an impact on supplying industries, manufacturers of glass products, plastic goods and primary steel all feeling the pinch from the cutbacks in auto production.
However, chemical product manufacturing advanced smartly, output rising a substantial 6.1% in the January-to-March period. The bulk of the gain came from the accelerating expansion of pharmaceutical production in Canada.
Healthy growth in construction activity continued to stimulate many manufacturing industries that provide building equipment and supplies. Producers of most types of wood products, fabricated metal structures and cement and ready-mix all increased or maintained previous production levels. However, the uncertainty surrounding the pricing of lumber as the Canada-United States Softwood Lumber Agreement came to an end had a depressing effect on sawmill production (-3.9%), concerns about the imposition of punitive tariffs in the agreement's aftermath staying the production plans of many producers.
Mineral sector spurred by high oil and gas prices
Output in the mineral sector rose 2.2% in the first quarter. Supported by high prices, oil & gas extraction and exploration increased for a second consecutive quarter. These gains were partly offset by lower output at potash and iron mines, the latter because of strike activity.
Wholesaling activity brisk
Wholesaling activity advanced a brisk 1.6% in the first quarter, more than double the previous quarter's performance. With growth of computer and software distribution remaining strong, the firming of demand for beverage, tobacco, automotive and non-farm machinery products was largely responsible for the higher rates of growth observed in the latest three-month period.
Auto and department store sales helped lift retailing
Retailing activity rose 1.3% in the first quarter, helped along by a partial bounce-back in auto dealership sales and increased consumer traffic at department stores. This contrasted favourably with the previous three-month period's performance, where overall retailing activity showed little change in the wake of a sharp drop in auto sales. Department store sales in the first quarter were buoyed by new store openings. Auto sales derived some stimulus at quarter-end by the resumption of dealer incentives, the interruption of which was partly responsible for the poor sales performance in 2000's final quarter.
The pace of growth of furniture stores continued to increase in the first quarter, in tandem with the strong housing market.
Construction remained resilient
Construction industry output rose 0.5% in the first quarter, the third consecutive gain. Building activity continued to be buttressed by a healthy housing market. Housing starts rose to the highest level in almost nine years, with the strongest growth in British Columbia and Québec.
Other industries
Communications services rose 2.4% in the first quarter, extending the solid growth of the previous eight years. Telephone carriers continued to lead this industry higher, with growth in cellular services providing most of its upward momentum. The falling stock market led to a drop in activity in the finance industries. An active housing market kept real estate agents busy in the first quarter. The government sector was up 0.9% in the first quarter, mainly due to higher output of federal government services.
[Main menu |
Highlights |
Tables and charts |
Appendices |
User information |
Products and services |
Contact us |
Français]
All rights reserved Statistics Canada
