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15-001-XIE Gross domestic product by industry April 2004 |
| Highlights
Economic activity advanced slightly in April as GDP rose 0.1%, following a strong 0.8% gain in March.
Higher prices for oil and gas propelled the mining sector as the production and exploration for oil and gas expanded significantly. The strong housing market translated into gains for residential construction, the real estate agents and brokerage industry, the financial sector and professional services from the legal industry and manufacturers of construction-related materials. Electricity generation bounced back somewhat from its retrenchment in February and March. Wholesaling activity advanced for the second consecutive month after tumbling the first two months of this year. Labour strife across the country resulted in a sizeable decline in the health care sector. The retailing industry gave up the gains made in March reflecting lower sales at new motor vehicle dealers. Manufacturing output fell slightly with widespread weakness. A drop in the number of tourists to Canada adversely affected the hotel and restaurant industries. The education sector reported its fourth consecutive monthly decline. Industrial production (mining, manufacturing and utilities) increased 0.3%, the sixth increase in the last twelve months, as higher mining and utilities output more than compensated for the weakness in the manufacturing sector. In comparison, the U.S. index of industrial production increased 0.8%, the ninth increase in the last twelve months as all components registered gains. Energy sector fuels economic growthThe mining and oil and gas sector bounced back from two consecutive monthly declines as higher energy prices propelled the extraction and exploration of oil and gas. Production of oil and gas increased 1.8% in April and is 4.7% higher than last year’s levels. Near record oil and gas prices combined with the need to maintain current production levels bodes well for the drilling and rigging industry.
Robust demand for housing continuesThe consumers’ insatiable demand for new homes continued in April with new-home construction up a further 0.9%. In the last twelve months, new-home construction increased 15.1%. Further interest rate cuts in March and April improved the affordability of buying a new home. Real estate agents and brokerages reported a 0.6% increase in activity; output in this industry has increased 14% since the start of the year. The strong housing market translated into increased economic activity for a number of industries. This latest housing boom which can be traced back to the summer of 2001 has buoyed the finance sector (demand for mortgage loan products), legal services, and the manufacturing, wholesaling and retail sectors (demand for construction-related materials and furniture and appliances). Public sector strikesThe health care sector reported a 1.0% decline in activity as public servant strikes in Newfoundland and Labrador and British Columbia hampered output. Two-thirds of Newfoundland and Labrador's public sector were on strike. Thousands of surgeries and tens of thousands of diagnostic procedures had to be cancelled in British Columbia as 43,000 health care workers in hospitals, clinics and long-term health care facilities walked off the job on April 26th. The Newfoundland and Labrador public sector strike also negatively impacted their provincial government administrative services and education services.
Travel and tourism industriesLabour strife also hit the travel and tourism industries. A strike at a Canadian casino at the beginning of April resulted in a 2.2% decline in the gambling industry. There was a huge drop in the number of same day visits at the Windsor border crossing as more than 85% of the casino’s clients come from the United States. Reduced activity was also reported by hotels and restaurants. Meanwhile, the number of Canadian tourists travelling overseas increased 3.2% benefiting both the air transportation and the travel agent industry.Manufacturing slowsManufacturing contracted 0.2% in April after jumping 1.6% in March. Primary metal manufacturing contracted 2.2% in April as iron and steel pipe production plummeted -9.2% and iron and steel mills and foundries shrank 6.2% and 4.0% respectively.The slowdown of 2.2% in ICT product manufacturing and 0.4% in machinery manufacturing was partially offset by gains in wood products of 1.3% and non-metallic mineral products of 1.0%. The paper industry declined 1.0% in April. This decline was mainly due to maintenance shutdowns at a number of mills and to some extent the strength of the Canadian dollar. Veneer, plywood and engineered wood product manufacturing industry increased 3.9% while sawmills and wood preservation improved 1.3% as the housing market in Canada and the U.S. remained strong. Gains in the chemical and non-metallic mineral industries helped balance manufacturing losses. Pesticide, fertilizer, and other agricultural chemical manufacturing was up 3.1% as conditions in the fertilizer industry continued to improve—the world's grain inventories as a percentage of consumption are reaching the lowest levels on record. Cement and concrete products manufacturing rose 2.8% reflecting strong domestic and foreign demand. Laminated plastics were also up a significant 4.6%. Seafood manufacturing declined 2.4%, as lower lobster stocks reduced the number of processing licences issued on the east coast and low product prices kept shrimp fishermen on shore. Tobacco production fell a further 2.6% in April due to upcoming closures and high levels of inventories. Output at wineries grew 4.7% in April as new product lines were introduced to the market and the exports of Canadian ice wine to the U.S. grew. |
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