Gross domestic product by industry

Gross domestic product (GDP) remained essentially unchanged in November. For the first 11 months of 2003, GDP was up 1.8% over the same period in 2002.

Production in the energy sector advanced 1.8%, the strongest month since February 2001, reflecting higher production and exploration of natural gas. Also, colder-than-normal temperatures helped boost the output of electricity generators and natural gas distributors. The transportation sector was up as a result of increased air travel. The housing boom continued into November, reflecting a gain in housing starts for single-family dwellings. In addition, higher output was reported by the health, education and government administration sectors.

Meanwhile, a sharp fallback in diamond production reduced mining sector output. Fewer new motor vehicle sales resulted in lower activity in the retail sector. Wholesalers overall also reported reduced sales. A reduction in the number of long distance calls had a negative impact on telecommunication service providers. The arts and entertainment sector stumbled, reflecting fewer lottery ticket sales and lower attendance at sporting events.

Industrial production (mining, utilities and manufacturing) remained unchanged, as higher utilities output was offset by a sharp reduction in the mining sector. The manufacturing sector maintained its production from October in spite of a strengthening Canadian dollar. From January to November, the Canadian dollar appreciated 19% against the US dollar. Manufacturing output for the same time frame dipped 0.6%. Industrial production in the United States advanced 1.1% in November, as all major components posted gains. For 2003 as a whole, US manufacturing was up 0.8%.

Colder temperatures fire up utilities

Colder-than-normal temperatures in Western Canada (large users of natural gas for heating) prompted a rebound in natural gas distribution. However, distribution declined in 7 of the last 11 months and remained below year-ago levels. Electricity generation increased 2.1% following three consecutive months of decline, as nuclear plants in Ontario came back online.

More Canadians travel abroad

More Canadians travelled abroad in November, as a stronger Canadian dollar made international travel a more affordable option. The air transportation industry benefited from this travel; activity rose a sizable 5.7%, as airlines discounted the prices on a number of flights. All of this increase came from international flights, which saw an increase of 13% in passengers. This latest expansion was not enough to offset the negative impacts of various unusual events over the last couple of years, as air travel remained 8.9% below August 2001 levels.

The hotel industry continued its recovery from the devastating impact of SARS this spring, although it remains below year-ago levels. Hotel occupancy rates have improved dramatically, but remain below last year's levels in Toronto and various other regions of the country.

Restaurants, which are less dependent on tourists, had quite a different story. They recovered from the impact of SARS almost immediately and are just slightly below year-ago levels. However, in November, restaurant output declined 0.3%. Travel agents registered a drop of 0.7%, remaining 3.7% below levels posted this spring. The arts and entertainment sector recorded a decline of 2.5%, reflecting lower attendance at spectator sports and fewer lottery ticket sales. Movie theatres posted a decrease of 1.2% in November, the second consecutive monthly decline.

Housing construction boom continues

Historically low interest rates continued to fuel the housing boom, as residential construction advanced a further 1.0% in November. Although total housing starts were down in November, the higher value-added component of single-family dwelling starts was up 4.0%. Record multiple-unit starts in the Toronto condominium market in the immediately preceding months also contributed to the building construction strength this month. Atlantic Canada had the largest increase in housing starts, partly reflecting rebuilding efforts after hurricane Juan. The resale housing market tumbled in November, with slower sales reported across the country. Real estate agents and brokers reported a decline in activity of 5.2%.

Weak car sales hurt retailing sector

Activity in the retailing sector fell 0.5% in November; sales of new motor vehicles fell 3.2%, the fourth consecutive monthly decline, reflecting fewer sales incentives. Retail sales excluding motor vehicle dealers increased 0.7%, the third increase in the last four months. Grocery stores, furniture stores and gas stations all reported increased sales.

Mining sector loses its shine

After a significant run-up in production the last two months, the mining sector dropped 1.0%, as diamond production returned to normal. Diamond production fell 40% in November, after a sizable gain of 43% in September followed by a further increase of 3.5% in October, as the industry took advantage of a pocket of high-grade ore. Natural gas extraction was up 3.8% in November; however, output was down 6.6% since the start of the year. Oil and gas exploration increased a further 4.9% in November and was up 17% over last year's levels, as energy prices continued to strengthen.

Manufacturers report mixed results

Manufacturing output remained flat in November as gains by producers of chemicals and information and communication technologies (ICT) equipment were offset by losses by food and wood product manufacturers. Chemical producers benefited from new contracts and there was a resumption of operations after maintenance shutdowns in October. ICT manufacturers increased production 2.4%, with growth reported by makers of telecommunications equipment and semiconductors. This strength raised activity levels for wholesalers of ICT equipment.

Sawmill operators reported a significant 3.4% drop in production in November. This industry was adversely affected by a strike in British Columbia as well as the stronger Canadian dollar. Food manufacturers and wholesalers reported lower output, as meat production declined 3.1% after a sizable gain of 4.7% in October.

Available on CANSIM: tables 379-0017 to 379-0022.

Definitions, data sources and methods: survey numbers, including related surveys, 1301 and 1302.

The November 2003 issue of Gross Domestic Product by Industry (15-001-XIE, $12/$118) is now available. A print-on-demand version is available at a different price.

Data on gross domestic product by industry for December 2003 will be released on February 27.

For general information or to order data, contact Yolande Chantigny (1-800-887-IMAD; imad@statcan.gc.ca). To enquire about the concepts, methods or data quality of this release, contact Jo Ann MacMillan (613-951-7248), Industry Measures and Analysis Division.