Analysis

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Real gross domestic product increased 0.4% in December after a decline of 0.1% in November and no growth in October. About half of the December gain was accounted for by increased oil and gas extraction. Production also rose in manufacturing, wholesale trade, the finance and insurance sector as well as construction. Retail trade edged down, while the output of utilities declined.

Oil and gas extraction rebounded in December (+3.0%) with increases in both crude petroleum and natural gas. This follows a 2.3% decline in November partially due to maintenance activities. Support activities for mining, oil and gas extraction decreased 12% as drilling and rigging activities fell partly due to unfavourable weather. Mining excluding oil and gas extraction was up 1.1%.

Manufacturers increased their output (+0.9%) for a fourth consecutive month in December. The production of durable goods (+1.1%) led the way, particularly the manufacturing of motor vehicles and parts and of primary metals. Non-durable goods production was also up (+0.5%), as increases were recorded in plastic and rubber products and printing.

Wholesale trade advanced 1.3% in December, on the strength of wholesaling of food, beverage and tobacco products, and motor vehicles and parts. Retail trade edged down 0.1%, as increases in food and beverage stores and in furniture and home furnishings stores were offset by declines in general merchandise stores (which include department stores) and motor vehicle and parts dealers.

Construction rose 0.4% as both residential building construction and engineering and repair works increased in December. The output of real estate agents and brokers grew 2.6% as a result of higher home resale activity.

The output of the finance and insurance sector rose 0.5% in December, in part owing to increases in personal loans, business loans and residential mortgages issued by deposit-accepting institutions.

Utilities decreased 1.0% as the demand for both electricity and natural gas declined due to unusually warm weather in December.

Fourth quarter 2011

Real gross domestic product grew 0.4% in the fourth quarter of 2011. Both goods-producing (+0.5%) and services (+0.4%) industries advanced. Manufacturing, retail trade as well as oil and gas extraction were the main contributors to growth, with gains also in professional, scientific and technical services, the public sector and construction. Mining excluding oil and gas extraction, utilities, wholesale trade as well as the finance and insurance sector declined in the quarter.

Manufacturing increased 1.5%, mostly on higher production of durable goods (+2.6%), particularly transportation equipment and machinery. Non-durable goods manufacturing edged up 0.1%.

Retail trade advanced 1.4% while wholesale trade declined 0.6%. Retailing activities at motor vehicle and parts dealers, food and beverage stores as well as pharmacies and personal care stores were up, while the wholesaling of petroleum products and personal and household goods declined.

Oil and gas extraction rose 0.9% in the fourth quarter, largely on increased natural gas production, as oil extraction was affected by maintenance activities during the quarter.

Professional, scientific and technical services rose 0.9%, and the public sector (education, health services and public administration combined) increased 0.2%.

Construction edged up 0.2%. A decline in non-residential building construction partially offset the gain in engineering and repair works. Residential building construction was unchanged, while the output of real estate agents and brokers increased 4.6% in the quarter.

Mining excluding oil and gas extraction decreased 3.8%, mainly because of a decline in output at potash mines as a result of lower foreign demand for fertilizer.

Utilities declined 1.6% as unseasonably warm weather contributed to lower demand for electricity and natural gas. The finance and insurance sector retreated 0.4%, led by lower output in the insurance industry and a lower volume of transactions on the stock exchanges.

Year-end review, 2011

Real gross domestic product (GDP) at basic prices increased 2.6% in 2011, following a 3.4% increase in 2010 and a 3.0% decline in 2009.

All major industrial sectors rose in 2011, with the exception of arts, entertainment and recreation. The production of goods grew 3.6% while services expanded 2.2%. Mining and oil and gas extraction, construction, the public sector (education, health services and public administration combined) and manufacturing were the main contributors to overall growth. Wholesale trade, retail trade and the finance and insurance sector also posted gains. The transportation sector also benefited from the general increase in economic activity.

Mining and oil and gas extraction grew 4.5% in 2011. Oil and gas extraction increased 3.3%. Petroleum production advanced, despite significant declines in the second quarter mainly due to maintenance shutdowns and wildfires in Northern Alberta. Natural gas production was down. Support activities for oil and gas extraction grew 16%. Mining excluding oil and gas advanced 5.2% on the strength in copper, nickel, lead and zinc mines.

Construction rose 4.1% in 2011, with engineering and repair work accounting for most of the increase. Residential building and, to a lesser extent, non-residential building construction also advanced. The output of real estate agents and brokers was up.

Manufacturing increased for a second consecutive year after four years of decline. The 2011 level of production was still 14% below that recorded in 2005, however. Durable goods manufacturing rose 5.0%, with manufacturers of machinery and, to a lesser extent, of fabricated metal products leading the way. Production of non-durable goods declined 0.8%.

Both the wholesale and retail trade sectors rose in 2011. Wholesaling of machinery and equipment was particularly strong while motor vehicles and parts dealers had the largest gain in retail activity.

The arts, entertainment and recreation sector declined 1.2%, partly a result of its return to more normal levels of activity following the Vancouver 2010 Olympic and Paralympic Winter Games.