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15-001-XIE Gross domestic product by industry May 2004 |
| Highlights
The economy expanded 0.3% in May, following a slight advance of 0.1% in April.
High crude oil prices since 2003 have helped set the stage for increased production, exploration and pipeline transportation of crude oil and natural gas products. The resolution of public sector labour strife boosted activity for the education, health and government administration sectors. Low interest rates continued to be a driving force in new home construction. Hotel operators benefited from higher occupancy rates across much of the country. Meanwhile, the wholesale and retail sectors were restrained by fewer new motor vehicle sales. Industrial production (mining, utilities and manufacturing) advanced 0.6% as all of the major components registered gains. The mining sector surged ahead 2.0% as higher prices for energy products encouraged the production and exploration for oil and gas. Metal ore and non-metallic mineral mines also increased output. The utilities sector was buoyed by higher electricity generation and natural gas distribution. Manufacturers increased production a slight 0.1%. Industrial production has gained 3.6% over the latest 12-month period. By way of comparison, the U.S. Index of Industrial Production jumped 0.9% in May, with all major components registering gains. The U.S. index has increased 5.9% over the latest 12-month period. Higher commodity prices lift mining sectorAs world oil prices climbed to 14-year highs, Canadian oil and gas producers expanded their output a further 2.0% in May. Over the past 12 months, Canadian oil and gas producers increased output 6.6% partly through additional oil sands capacity. Oil and gas exploration advanced 0.9% in May. Exploration activities jumped 15% during the latest 12-month period as oil prices climbed 52%. Pipeline transportation of oil and natural gas increased 4.7%. High crude oil prices found their way to retail gasoline pumps.
Output from non-metallic mineral mines jumped 11%—mainly diamonds and potash. Metal ore mining increased 2.0%, as this industry also benefited from higher prices as world demand continued to climb for copper, nickel and zinc. End of labour disruptions boosts public sectorThe resolution of Newfoundland and Labrador’s 28-day public sector strike at the end of April translated into a rebound for elementary and secondary schools, hospitals and provincial government administration. The health care sector strike in British Columbia, which continued until the 12th of May, held back the full recovery of the hospital sector as output in the sector remained 2.6% below March’s level.
Housing boom continuesThe boom in new home construction continued in May, with a further increase of 0.8%. Despite the slight declines in the number of housing starts in April and May, the carryover impact from the strong housing starts earlier in the year maintained growth in residential construction activity. Housing starts exceeded 200,000 units at annual rates since the beginning of the year. May housing starts tumbled 14% in British Columbia, while the rest of the country registered gains. Multiple dwelling starts fell 5.4%, while single-family dwelling starts jumped 3.6%. The real estate agent and brokerage industry declined slightly for the second straight month, reflecting the recent lull in the resale housing market. Despite the recent weakness in this industry, activity levels are 15% higher than year-ago levels. Travel and tourism industries mixedIndustries in the travel and tourism sector reported mixed results in May. Although the number of tourists visiting Canada declined in May, the number of those tourists staying one or more nights increased 1.9%. The accommodations industry posted a jump of 3.8%. Hotel occupancy rates across the country improved in May, with a number of regions returning to pre-SARS levels. Restaurants reported an increase of 0.6%. Air transportation edged down slightly in May, although this industry has expanded 21% since a-year-ago. A strike at a Canadian casino until the middle of May continued to impact negatively on the gambling industry, as did a drop in the number of lottery ticket sales. Manufacturing output edges upManufacturers increased production a slight 0.1% in May. Information and communications technology manufacturers recovered somewhat from the downturn in April. All producers of machinery and equipment posted gains in May from agricultural equipment manufacturers to producers of power turbines. Pulp and paper (except newsprint) manufacturers ramped up production. Meanwhile, sawmills and other construction-related wood product manufacturers reduced their output. Poultry processors continued to be adversely impacted by the avian flu crisis for the second straight month. Poultry processing declined 6.4%, following a sizeable decline in April. The manufacturing of motor vehicles and parts fell in May as lower-than-expected consumer demand prompted layoffs in the industry.Retailers and wholesalers report declinesWholesaling activity declined 1.1% in May, the third decline since the start of the year. The weakness in wholesaling this month can be attributed to lower activity for wholesalers of motor vehicles and parts. Lower new motor vehicle sales were also responsible for the weakness in the retailing sector. Retail sales excluding motor vehicles and parts advanced 0.5%. Consumer confidence fell in May to its lowest level since August 2003, which may have reflected concerns over high gasoline prices and in turn reduced demand for new motor vehicles. |
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