Gross domestic product by industry

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September 2007

Economic activity was up 0.1% in September, after increasing 0.2% in August and 0.1% in July. The gain recorded by the service producing industries (+0.2%) was partially neutralized by the decrease in the production of goods (-0.1%). Increases in the energy sector and wholesale trade propelled the growth, while a decline in manufacturing and retail trade dampened it. Gains were also registered in construction and in the accommodation and food services sector. The finance and insurance sector and metal ore mining were additional sources of declines.

Chart C.1 Economic activity edges up

Wholesale trade increases significantly

Wholesale trade rose 1.0% in September, for a fifth consecutive monthly increase. Gains were posted in the trade of food and beverage products, motor vehicles, and building supplies. Household and personal products, metal and petroleum products also advanced. These gains were dampened by declines in the wholesaling of oilseeds and grains, computer and other electronic equipment, lumber and millwork, and office and professional equipment.

Chart C.2 Main industrial sectors' contribution to total growth - September 2007

Manufacturing falls for a second straight month

Manufacturing retreated 0.9% in September, on the heels of declines in August and June, while the Canadian dollar appreciated vis-à-vis the U.S. currency. The production of non-durable (-0.7%) and durable goods (-0.9%) declined. Of the 21 major manufacturing groups, 16 decreased, these accounting for 78% of total manufacturing value added.

The manufacturing of paper, motor vehicles, food products, and computer and electronic products, all posted significant decreases. Notable increases were recorded by the chemical and printing sub-sectors.

Chart C.3 Manufacturing sector falls sharply

Industrial production (the output of mines, utilities and factories) retreated 0.3% in September. The gains in utilities and mining were not enough to offset the decline in manufacturing. In the United States, industrial production increased 0.2% in September. Both manufacturing and mining moved ahead, while utilities fell.

Energy sector posts gain

The energy sector advanced 0.8% in September, after remaining unchanged in August. Electricity production jumped 1.7% in September on the strength of increased hydro production. Natural gas production posted a slight increase while crude oil production slipped. Oil and gas exploration moved ahead (+3.7%) for the fourth month in a row, but still remains well below its level of activity recorded in early 2007.

The output of the mining sector excluding oil and gas slipped 0.1% in September. The declines in metal ore mines were partly offset by the gains in non-metallic mineral mines (which includes diamonds). In particular, copper, nickel, lead and zinc mining made a return to a more normal level of activity following a record-high month of August.

Construction advances

The construction sector advanced 0.4% in September, a fifth consecutive monthly increase. The gains recorded in residential construction (+0.8%) and engineering and repair work (+0.3%) overshadowed the modest slip in non-residential building construction (-0.1%). The construction of single-family homes and multi-unit structures propelled residential construction. For the second month in a row, industrial building construction posted a gain while commercial and public building construction retreated. Engineering construction stood still.

After record-high levels of activity in June and July, the home resale market retreated for a second consecutive month in September, due to the significant decline in sales in the major markets. As a result, the real estate agents and brokers industry fell 1.6% for the month.

Retail trade retreats

After a very strong showing in August, retail trade experienced a slight decrease of 0.3% in September. Sales by new and used car dealers fell. Sales of computer, and pharmacies and personal care stores, also retreated. Gains were recorded by food and beverage stores, building material stores, as well as general merchandise stores (which include department stores).

Other industries

Activities in the finance and insurance sector slipped 0.1%. The decline experienced by the insurance sector was only partially offset by the slight gain posted by banking. The accommodation and food services sector rose 1.1% in September. The number of international overnight travellers to Canada advanced 1.9%. The visitors from the United States accounted for the bulk of this increase.

Third quarter 2007

Economic activity grew at a slightly slower pace in the third quarter of 2007 than in the second. The Canadian economy grew 0.1% in September, after increasing 0.2% in August and 0.1% in July.

The output of the service industries expanded 0.9% in the third quarter, while the production of the goods industries contracted 0.1%. Significant growth was recorded in wholesale trade. The finance and insurance sector, construction, mining, and accommodation and food services also contributed to the overall increase. These gains were partly offset by declines in manufacturing, utilities, and forestry and logging.

Wholesale trade, up 2.7%, continued its strong quarterly ascent that began in 2004 and was interrupted only temporarily in the fourth quarter of 2006. This quarterly increase was largely on the strength of sales by merchants of machinery and equipment, and motor vehicles. Apparel, household and personal products, pharmaceuticals, building supplies and metal products, also contributed to the increase. However, lumber and millwork, and alcohol and tobacco wholesaling activities fell back.

The finance and insurance sector advanced 1.1% on the strength of banking and brokerage. Real estate agents and brokers posted a 2.7% drop, as transactions in the home-resale market returned to a more normal level after several months of record-breaking activity. Construction activities grew 1.4% in the third quarter. All types of construction activities increased, with residential construction leading the sector.

Retail trade edged up 0.6% in the third quarter largely due to sales by clothing and computer stores, and beverage vendors. Conversely, sales of motor vehicles, used and recreational motor vehicle and parts dealers, and convenience stores declined.

The energy sector edged up 0.1% in the third quarter. While oil and gas exploration jumped 19.7%, utilities (-1.6%), and oil and gas extraction fell (-0.8%) during the quarter. Although the increase in oil and gas exploration was quite significant, this followed a 28% decline in the second quarter and was still well below the levels of activity registered at the beginning of the year and in 2006 and 2005.

Following two quarters of growth, manufacturing activities fell 0.7% in the third quarter, on a backdrop of an appreciating Canadian dollar. Of the 21 major groups, 15 decreased, these accounting for 60% of total manufacturing value added. The production of both non-durables (-0.4%) and durables (-0.9%) declined during the quarter. Sawmills, fabricated metal products and machinery manufacturing, recorded notable declines for the third quarter. Conversely, motor vehicle and associated parts manufacturing increased during the quarter.

Industrial production (the output of utilities, mines and factories) slipped 0.4% in the third quarter. Utilities and manufacturing both declined. Mining moved forward as a result of the increase in oil and gas exploration as well as in metal ore mining. In comparison, all three sectors increased in the United States resulting in an overall gain of 1.1% for the quarter.

Data tables

• Table C.1 Real gross domestic product by industry, at basic prices, monthly
• Table C.2 Real gross domestic product by industry, at basic prices, quarterly and annually

Information on methods and data quality available in the Integrated Meta Data Base: 1301.