Canada: GDP by industry, September 2016

Real gross domestic product rose for the fourth consecutive month in September, growing 0.3%. Higher output in the mining, quarrying, and oil and gas extraction sector was the major contributor to the increase.

Goods-producing industries grew by 1.1% as all sectors increased, led by mining, quarrying and oil and gas extraction.

Service-producing industries edged up 0.1%. Most sectors advanced, led by gains in the public sector (education, health and public administration combined), real estate and rental and leasing, and professional services. These increases were mostly offset by declines in wholesale trade, information and cultural industries and finance and insurance services.

Mining, quarrying and oil and gas extraction continues to grow

The output of the mining, quarrying and oil and gas extraction sector was up 2.7% in September. After declining in the first half of 2016, the output of this sector has grown every month since June, reversing the earlier declines.

Oil and gas extraction (+3.8%) rose for a fourth consecutive month in September after declining from February to May. Both conventional oil and gas (+1.7%) and non-conventional oil extraction (+6.5%) increased in September.

Support activities for mining and oil and gas extraction grew by 5.0% as rigging and drilling services increased.

Mining excluding the oil and gas extraction subsector fell 2.0%. After recording a strong August, non-metallic mineral mining declined 3.9% in September as a result of a decrease in potash mining due to lower exports. Coal mining and metal ore mining also posted lower output.

Construction increases

Construction increased 0.7% in September following four consecutive monthly declines. Residential construction was the major contributor to the increase, rising 1.7%. Non-residential and repair construction also rose, while engineering construction edged down.

Real estate and rental and leasing rose 0.2% in September. Real estate agents and brokers were up 0.3% as continued declines in the Lower Mainland of British Columbia were more than offset by continued gains in the Greater Toronto Area.

Manufacturing output rises

Manufacturing output rose 0.5% in September. Both durable and non-durable manufacturing contributed to the growth.

Durable manufacturing was up 0.8%, led by increases in machinery (+4.7%) and fabricated metal products (+3.0%) manufacturing. Transportation equipment output declined 1.5% as the output of motor vehicle manufacturing, motor vehicle body and parts, aerospace and other transportation equipment fell. Primary metal manufacturing also declined.

Non-durable manufacturing edged up 0.1%. Increases in food and paper manufacturing were mainly offset by declines in chemical and petroleum and coal products.

The public sector increases

The public sector (education, health and public administration combined) increased 0.3% in September as all three subsectors rose. Educational services rose by 0.4% in September, while heath care and social assistance increased 0.3%. Public administration was up 0.2%.

Wholesale trade declines and retail trade rises

Wholesale trade had the largest negative impact on real gross domestic product in September, down 1.3%. Machinery, equipment and supplies, miscellaneous wholesaling (such as agricultural supplies and recyclable materials) and food, beverage and tobacco registered the largest declines.

Retail trade edged up 0.1% in September, led by motor vehicle and parts dealers and general merchandise stores. The most significant decline was in food and beverage stores.

Transportation and warehousing services increase

Transportation and warehousing services were up 0.2% in September. Rail transportation was up 1.8% as movement of grain and fertilizer increased. Pipeline transportation rose mainly due to increased crude oil transportation. Air and water transportation were also up. The most significant decline was in couriers and messengers.

Finance and insurance declines

Finance and insurance was down 0.2% in September. There were declines in banking and other depository credit intermediation and financial investment services, funds and other financial vehicles.

Other industries

Utilities declined 0.2% as lower natural gas distribution more than offset increases in electric power generation, transmission and distribution.

Accommodation and food services edged down 0.1%. The decline in accommodation services, which followed five consecutive monthly increases, was partially offset by an increase in food services and drinking places.

The output of the arts, entertainment and recreation sector rose 1.5% on the strength of higher attendance at spectator sports events such as Major League Baseball and the World Cup of Hockey.

Main industrial sectors’ contribution to the percent change in gross domestic product in September

Gross domestic product by industry

Third quarter

The value added of goods-producing industries increased 2.3% in the third quarter, following a 2.3% decline in the second quarter. The value added of service industries rose 0.5% in the third quarter.

The main contributor to growth in goods-producing industries was non-conventional oil extraction. A record 23% increase in the third quarter offset an 18% decline in the second quarter that was largely attributable to the Fort McMurray wildfire and maintenance shutdowns. Conventional oil and gas extraction (+3.1%) increased for a third consecutive quarter.

Mining except oil and gas was down for a second consecutive quarter, declining 1.3% due to lower output from metal ore and non-metallic mineral mining.

Manufacturing output increased 1.0%, the highest quarterly growth since the second quarter of 2014, as a result of gains in non-durable manufacturing. Utilities, led by an increase in electric power generation, transmission and distribution, rose 3.7%, as much of Eastern and Central Canada experienced warmer than usual weather in the third quarter. Construction (-0.8%) declined for the seventh consecutive quarter.

Transportation and warehousing (+1.8%) and finance and insurance (+1.0%) were the main contributors to the growth in the service industries in the third quarter. The public sector (education, health and public administration combined) rose 0.4%, mainly from a rise in health care and social assistance. Wholesale trade was essentially unchanged while retail trade declined.

StatsCanada

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell