Analysis

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Real gross domestic product continued to expand in January, rising 0.5%, the same pace as in December. Growth was driven by manufacturing and, to a lesser extent, by transportation and wholesale trade. The finance and insurance sector, construction and real estate also increased. Mining and oil and gas extraction as well as retail trade decreased.

Manufacturing increases

Manufacturing grew 2.8% in January following a 0.8% gain in December. Although growth was broadly based in both durable and non-durable goods, manufacturers of fabricated metal products and of motor vehicles and associated parts recorded the largest increases.

The January rise in motor vehicles and parts production was partly a recovery from temporary factors: shutdowns for retooling in November 2010 and unfavourable weather that hampered production in December. Other industries that contributed to January's rise in manufacturing were food, beverage and tobacco, and machinery. Output at refineries decreased.

Transportation and warehousing sector up

The transportation and warehousing sector advanced 1.2%. Higher iron ore output in January helped to boost rail transportation (+5.0%). Truck transportation (+1.1%) benefitted from increased activity in manufacturing and wholesale trade. There was also a marked increase in pipeline transportation of natural gas, mirroring the growth in exports of that commodity.

Wholesale trade grows

Wholesale trade (+0.7%) increased for a fourth consecutive month. Wholesalers of motor vehicles and parts and of building materials recorded significant increases. In contrast, wholesaling of petroleum products declined.

Retail trade edged down 0.1% in January. Gains in general merchandise stores (which includes department stores) and in food and beverage stores were more than offset by lower activity at gasoline stations, new car dealerships and furniture stores.

Upward movement in finance and insurance

The finance and insurance sector grew 0.6% due to higher volume of trading on the stock exchanges and increased financial intermediation (personal and business loans, mortgages and mutual fund sales).

Construction rebounds

Construction activity rose 0.4% with increases in all components (residential and non residential buildings as well as engineering and repair work). Activity in the home resale market continued to advance, resulting in a 2.6% increase in the output of real estate agents and brokers.

Mining and oil and gas extraction declines

Mining and oil and gas extraction retreated 0.5% in January. The decline was partly attributable to difficulties affecting synthetic oil production. In contrast, natural gas extraction continued to grow. Support activities for mining, oil and gas extraction also declined mainly as a result of reduced drilling activity.