Gross domestic product by industry

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June 2008

Real gross domestic product increased 0.1% in June after declining 0.1% in May and growing 0.4% in April. There were increases in construction, wholesale trade, the public sector as well as in transportation services, and declines in natural gas extraction, manufacturing and forestry. The finance and insurance sector and some tourism-related industries were unchanged.

Chart C.1 Economic activity edges up

Construction advances

The construction sector increased 0.4% in June. The strong gain in engineering and repair work (+1.1%) and the slight increase in residential building construction more than offset the 1.4% decline in non-residential building construction. In residential building construction, apartment and semi-detached home construction advanced, while single-family and row house construction, and alterations and improvements work lost ground. Construction of commercial, industrial and institutional buildings decreased in June, adding to the downward trend.

The output of real estate agents and brokers continued to decline, reflecting the slowdown in the real estate market that started in December 2007.

Wholesale and retail trade advance

Wholesaling activity advanced 0.5% in June. There was a notable increase in the wholesaling of automotive products, foods products and building supplies. Conversely, the volume of activity of other products (which primarily include agricultural, chemical, recycled material and paper products), and computers and other electronic equipment, decreased.

Chart C.2 Wholesale trade advances

Value added in the retail trade sector rose 0.1%. Higher volume of activity at supermarkets and shoe stores, along with stronger volume of sales of alcoholic beverages, propelled the industry. In contrast, activities declined at new and used car dealers and gasoline stations.

Output of the energy sector falls

Output of the energy sector decreased 0.6% in June. Oil and gas extraction fell 1.6% due to the decline in natural gas extraction.

Canadian storage of natural gas rose for the second consecutive month as facilities replenished their stocks. United States storage dipped slightly in June. The distribution of natural gas declined, while pipeline transportation increased 3.1%.

Contract drilling was robust in June as activities picked up speed, after four months of decline. The utilization rate of the available rigs surpassed the previous year’s rate of activity for the industry for the same month. Also, electricity generation edged up 0.2%.

The output of the mining sector excluding oil and gas rose 0.7% in June. Both metal ore and non-metal mines moved ahead.

Manufacturing activity down slightly

Manufacturing production slipped 0.1% in June. The decline in non-durable manufacturing eclipsed the increase in durable manufacturing. Printing and related support activities, and paper product manufacturing, retreated. Conversely, motor vehicle production rebounded following a May drop. Manufacturing of machinery posted an increase.

Despite a slight decline in June, the level of manufacturing of petroleum and coal products remained high following the completion of maintenance and repairs by some refineries earlier this year.

The finance and insurance sector unchanged

The finance and insurance sector remained unchanged in June. Banking services advanced slightly during the month, while the level of activity in insurance and non-deposit credit intermediation fell. Stock brokerages declined as sales of mutual funds dropped significantly.

Chart C.3 Main industrial sectors' contribution to total growth, June 2008

Other industries

A decline in the number of overnight travellers from the United States and abroad may have contributed to a stagnant month for the accommodation and food services sector.

Activity in the forestry industry fell 3.4% as the industry continued to suffer from a weak international demand for its products.

Second quarter 2008

Real gross domestic product edged up 0.1% in the second quarter of 2008 after retreating 0.2% in the first quarter. Goods producing industries continued their decline which began in the third quarter of 2007, as foreign demand continued to weaken, while activity in the service industries continued to advance.

Production in the service industries was up 0.6% during the second quarter with gains in the public sector, finance and insurance, accommodation, retail trade and transportation leading the way. Significant declines in the energy sector, notably natural gas production, and continued contractions in manufacturing activities, albeit at a much reduced pace compared to previous quarters, were behind the 1.0% decline in the goods-producing sector.

The public sector continued to advance, with all three major components (public administration, health and social services, and education) recording a gain. Increased activities at banks and on the financial markets helped push the financial sector ahead in the quarter. The increased number of overnight international travellers to Canada contributed to the gain recorded in the accommodation industry. Value added in retail trade moved forward 0.7% despite reduced volume of sales of both new and used cars. There were strong advances in retailing activities at computer and home electronic stores.

The energy sector fell 2.3% for the quarter hampered by lower levels of natural gas production and significant declines in support activities for mining and oil and gas extraction. Exports of natural gas were down significantly in the second quarter. Mining excluding oil and gas increased 2.0% with gains in both metal and non-metallic mineral mines. Electricity production dropped 1.3% as cool spring temperatures decreased the demand.

Value added in manufacturing continued to contract during the second quarter of 2008, down 0.6%. The most export-oriented sub-sectors of wood products and transportation equipment manufacturing again led the decline. Following significant reductions in recent quarters, especially in the first, motor vehicle production increased 0.4% in the second quarter, but remained well below its 2007 level. Manufacturing of motor vehicle parts retreated for a fourth consecutive quarter. Production in the Canadian motor vehicle industry has been volatile in recent months in the context of shutdowns as a result of inventory control and retooling, a two-month strike at a supplier of parts located in the United States, and shifting demand mainly due to high gasoline costs.

Construction activities fell in the second quarter due to declines for residential and non residential buildings. The slower pace of activity was reflected in related retailer, wholesaler and manufacturing subsectors.

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.