Canada’s Industry-based GDP -0.2% in February
Alex Carrick
Statistics Canada has just released Gross Domestic Product (GDP) results on an industry basis for February 2008. On the heels of a 0.6% advance in January, month to month, Canadian GDP was -0.2% in February. There have been other recent periods of weakness – for example, December 2007 was -0.7% − but the latest number adds to growing concern that Canada is following the United States into a period of slowdown.
Wholesale Trade and Manufacturing Struggle the Most
The industrial sectors recording the poorest showings were all expected, based on earlier published reports. Wholesale trade (-1.4%) and manufacturing (-0.7%) struggled the most. Retail trade (-0.6%), transportation and warehousing (-0.5%) and finance, insurance and real estate (0.0%) also contributed to the generalized malaise.
Within manufacturing, wood products (due to the U.S. housing collapse) and petroleum and coal products (due to some maintenance shutdowns by refineries in the West) had the most trouble. Within oil and gas extraction (-0.6%), exports and storage of natural gas declined, but exports of crude oil were up considerably.
Construction Activity +0.2%
Industries turning in solid performances on a month-to-month basis included accommodation and food service (+0.6%) and arts, entertainment and recreation (+0.4%). These are the tourism industries and their strength is somewhat surprising, given the climb in value of the “loonie” versus the greenback. Activity levels in construction were ahead by +0.2% in the latest month, spread across a good range of project types.
Rules of Thumb
Goods production comprises about 30% of total GDP and services make up the other 70%. Within goods-producing industries, manufacturing accounts for about half of total activity. Within services-producing industries, one-quarter is mainly consumer-related (the sum of wholesale and retail trade, plus transportation and warehousing) and another slightly-more-than-one-quarter is finance, insurance and real estate.
