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Gross domestic product by industry
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March 2009
Real Gross Domestic Product decreased 0.3% in March after a 0.1% decrease in February. The declines in February and March were less pronounced than those in the preceding three months.
The output of the energy and manufacturing sectors were the main sources behind the March contraction. Lower activity in wholesale trade, construction, transportation, accommodation and food services, and forestry added to the weakness. The finance and insurance sector, the public sector (health, education and public administration combined), retail trade, and mining excluding oil and gas extraction all advanced.
Chart C.1 Economic activity continues to decline
Energy sector output falls
The output of the energy sector fell 1.9% in March. A significant drop in support activities for oil and gas extraction along with a 1.5% decrease in oil and gas production lowered output in the sector. Both the extraction of natural gas and petroleum decreased. Electricity generation and the distribution of natural gas were both up for the month.
The output of the mining sector excluding oil and gas extraction increased 1.1% in March. There was a partial rebound in potash production as the industry continued to adjust its output to weakened demand. Despite a significant contraction in iron ore mines as the demand for steel products continued to retreat, the output of metal ore mines increased on the strength of copper and nickel extraction.
Chart C.2 Energy sector output decreases
Manufacturing retreats
Activity in the manufacturing sector retreated 1.0% in March, continuing its downward trend. Both durable and non-durable goods manufacturing fell. Of the 21 major manufacturing groups, 15 retreated. Machinery, primary metal products and motor vehicle parts manufacturing led the reduction in durable goods. The drop in the manufacturing of paper products was the largest among the non-durable industries. Motor vehicle production grew for a second consecutive month.
Wholesale trade edges down
The volume of activities in wholesaling industries declined 0.7% in March, mirroring the decrease in exports and imports. The most notable drops were in the wholesaling of machinery and electronic equipment, and personal and household goods. The wholesaling of automotive products and food, beverage and tobacco products moved ahead.
Construction decreases
Construction activity decreased 0.4% in March. The drops in residential building construction and engineering and repair work eclipsed the increase in non-residential building construction.
Residential building construction retreated 0.3%. All categories of dwellings posted significant declines. However, alterations and improvements work increased in the month.
Non-residential building construction increased 0.3% in March on the strength of institutional and commercial buildings. Industrial building construction fell.
After experiencing several monthly declines, the home resale market improved, translating into a 6.4% increase in real estate agents and brokers activities.
The finance and insurance sector increases
The finance and insurance sector rose 0.4% in March. The gain was mostly attributable to an increase in the volume of trading on the stock exchanges. The gain was partially offset by a fall in mutual fund sales. Furthermore, widespread declines were registered in traditional banking services.
Retail trade edges up
Value added in retail trade edged up 0.3% in March. The volume of activities at new car dealers increased during the month. Advances were also posted by beer, wine and liquor stores, supermarkets and pharmacies. These gains were partially offset by the decreases registered by used car dealers and home electronics and appliance stores.
Chart C.3 Main industrial sectors' contribution to the percent change in gross domestic product – March 2009
Other industries
A decrease in overnight visitors to Canada contributed to a decline in accommodation and food services. Furthermore, the output of the rail and truck transportation services decreased in light of weak demand by the manufacturing and wholesale sectors.
First quarter 2009
In the first quarter of 2009, real Gross Domestic Product decreased at a faster rate than in the fourth quarter of 2008. The decreases in February and March 2009 were not as pronounced as those in the preceding three months.
As was the case in the fourth quarter 2008, lower production of goods (-4.0%) led the decline in the first quarter of 2009, while the production of services also decreased (-0.5%). All goods producing sectors retreated. The manufacturing sector, pulled down by a 26% reduction in motor vehicle and parts production, accounted for about half of the overall decline in the first quarter of 2009. Wholesale trade and transportation services declined the most among the service producing sectors. The increases in the public sector (which includes education, health and social services, as well as public administration) helped mitigate the decline in the production of services.
The manufacturing sector fell for a seventh consecutive quarter (-6.1%), as both durable (-9.2%) and non-durable (-2.0%) goods production were reduced. The decrease in the first quarter was widespread, with 18 of the 21 major manufacturing groups recording a decline. Production levels of motor vehicles and parts manufacturers were still being adjusted to reduced demand, both foreign and domestic.
The manufacturing of primary metal, fabricated metal products, machinery, wood products and non-metallic mineral products also retreated, partly reflecting the reduced levels of global economic activity, particularly of construction activities, in both Canada and the United States.
Mining, excluding oil and gas extraction, dropped 10% as the demand for many commodities declined, particularly potash, copper, nickel and iron ore. This led to some temporary closures in this sector. The energy sector declined 1.4% led by a sharp reduction in support activities for mining, oil and gas extraction (-32%). The production of electricity decreased 1.3% in line with the reduced needs of many manufacturers, while oil and gas extraction increased 1.3%. The price of crude oil stabilized during the first two months of the quarter. Production of natural gas increased in the quarter after six quarterly declines.
Wholesale trade decreased 5.6% for a second quarter in a row in the first quarter of 2009, due to reduced volume of wholesaling of automotive products, machinery and electronic equipment, as well as building materials. Value added in retail trade declined 0.8% with retailers of automotive products (particularly used car dealers and gasoline stations), of furniture, home furnishings and electronic equipment, and of building and outdoor home supplies contributing the most.
The transportation and warehousing sector (-2.0%) was also affected by the reduced level of economic activity as truck, rail, water and air transporters had reduced output. Activities in urban transit transportation also fell, largely because of a labour dispute in Ontario.
The finance and insurance sector decreased 0.7% mainly because of reduced volume of activities by securities traders.
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.
