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The Daily. Tuesday, July 18, 2000
The goods sector outperformed the services sector in terms of economic growth for the sixth straight quarter.
Output in the services sector as measured by gross domestic product increased a healthy 0.9% in real terms in the first quarter compared with the fourth quarter of 1999. However, output in the goods sector increased at a more robust rate of 1.3%.
Among services industries, growth was especially strong in the deposit-accepting intermediaries industry, where output rose 4.7% in the first quarter, partly because of record levels of stock market activity. Output rose 4.4% in the insurance and real estate agents industry in response to strong housing market conditions.
Canada's overall trade surplus increased from $7.3 billion in the fourth quarter of 1999 to $10.8 billion in the first quarter of 2000. Less than 5% of this increase came from trade in services. However, the services sector shaved $163 million from its trade deficit, largely owing to travel account improvements arising from a slowdown in spending abroad by Canadians.
Employment in services industries declined by 28,900 during the first quarter, the equivalent of 0.3% of the sector's work force. Seasonal factors usually result in higher services job losses in the first three months of most years. Given that services employment declined by an average of 0.7% in the first quarters of 1995 through 1999, this year's first quarter employment losses were relatively mild.
While part-time employment in services increased by 15,400 during the first quarter, 44,200 full-time positions were lost. A greater reliance on part-time service workers is also typical during the first quarter of most years. The proportion of services workers employed on a part-time basis has increased during the first quarter in 9 of the past 10 years.
On a year-over-year basis, services sector output was 3.8% higher in the first quarter than it was in the first quarter of 1999. This rate of growth was well short of the 6.2% increase in the goods sector.
Services are less sensitive to changes in the business cycle than are goods, hence the faster growth of the goods sector during this period of economic expansion. Since the end of the recession of the early 1990s, the gross domestic product for the goods sector rose 34% in real terms, while that of the services sector grew 25%.
Year-over-year increases were strongest in the telecommunication carriers and other telecommunication services industry, where output rose 17.8% compared with the first quarter of 1999. This may be due to an upsurge in demand for wireless telecommunication services, calling feature services and data communications.
The computer and related services industry category continued to expand, growing 17.6% compared with 1999. Although output growth in this industry tapered off during the first quarter of 2000, demand for computer services in the preceding quarters had been particularly high because of concerns about potential Y2K-related complications.
These increases in output were partly offset by small declines in the accommodation services industry (-3.4%) and in the health and social services sector (-0.4%).
The service sector added 286,500 new jobs since the first quarter of 1999, an increase of 2.7%. Of these new jobs, almost 96% were full-time. Even so, the proportion of services workers that are employed part-time remains more than triple the proportion in the goods sector.
Services indicators also includes the feature article "Characteristics and performance of hotels and motor hotels," a profile of the hospitality industry based on 1997 results from the Traveller Accommodation Survey.
The first quarter 2000 issue of Services indicators (63-016-XIB, $26/$87; 63-016-XPB, $35/$116) is now available. See How to order products.
For more information, or to enquire about the concepts, methods or data quality of this release, contact Don Little (613-951-6739; littdon@statcan.gc.ca), Services Industries Division.