2002 could turn out to be banner year for Canadian economy, says StatsCan
Ottawa, ON -- Feb. 3, 2003 -- The latest economic expansion took a pause in November, as gross domestic product (GD...
Ottawa, ON — Feb. 3, 2003 — The latest economic expansion took a pause in November, as gross domestic product (GDP) edged up 0.1%, following a 0.3% gain in October, according to the latest economic report from Statistics Canada. Industrial production remained unchanged in November, as lower utilities output offset gains in mining and manufacturing.
Lower consumer confidence levels had a negative impact on retailers in November. Retailing activity declined 1.1%, mostly the result of a 3.5% drop in sales at new motor vehicle dealers. November marked the one-year anniversary of the introduction of zero-percent financing by the Big Three US automakers; at that time, sales surged 6.1%.
Despite the setback this November, 2002 is looking like a banner year. With the exception of furniture stores and gasoline stations, most retailers reported lower activity levels in November after reporting strong gains in October.
After gaining 25% since mid-2001, the residential construction industry slowed down in November, advancing 0.1%.
<b>Industrial production unchanged</b>
Industrial production (mining, utilities and manufacturing sectors) remained unchanged in November, as reduced electricity generation offset gains in mining and manufacturing. Industrial production growth has been muted since a 1.5% surge in July.
Comparable U.S. statistics on industrial production showed an increase of 0.1%, as a surge in motor vehicle production led to the first monthly increase since July.
Output from the Canadian mining and oil and gas sector increased 0.9%, as higher crude oil and natural gas prices drove exploration activity up 9.2% in November. However, drilling and rigging activity levels were almost 10% below November 2001 levels. Exploration and drilling budgets had been cut in 2002 in anticipation of low energy prices. Meanwhile, oil and gas output declined 0.5% as a result of lower production of synthetic oil.
Production from Canadian mines expanded significantly in October and November, after declining for much of 2002, as a number of mines re-opened after closures earlier in the year.
Electricity generation fell 1.4%, the second consecutive monthly decline, as breakdowns at hydro-generating stations reduced capacity. Each type of electricity generation — nuclear, thermal and hydro — all reported reduced output in November.
Manufacturing output changed little (+0.1%), as gains by non-durable goods manufacturers were offset by declines of durable goods manufacturers. Increases by producers of concrete, cement, paper products, wood products, chemicals, plastics and rubber products were offset by lower production of transportation equipment, computer and electronic products, fabricated metal products and furniture. Lower production of computers and telecommunications equipment continued to reduce the output of the information and communication technologies (ICT) manufacturing sector. ICT manufacturing declined 1.1% in November, the second consecutive monthly decline.
Manufacturers of transportation equipment pared back production a further 0.8% in November, the third consecutive monthly decrease. Manufacturers of motor vehicles and heavy trucks cut output 5.6% in an attempt to reduce rising inventories as the North American market for new motor vehicle sales cooled down in recent months. Meanwhile, motor vehicle parts production expanded 2.8%, mainly the result of added capacity. Fabricators of aerospace products and parts reduced production a further 0.9%, as anemic demand since September 2001 for air travel continued to have a negative impact on this industry.
Sawmill producers decreased output slightly in November; however, output levels in this industry were 17% higher than in November 2001. Over the past 12 months, sawmill production peaked in April 2002 — the month before the United States imposed countervailing and anti-dumping duties averaging 27.2%. Lumber exports fell slightly in November after surging 7.3% in October, mirroring the production data. Since the imposition of the duties, sawmill producers have ramped up production in an attempt to reduce unit costs. Lumber prices, as a result, have fallen dramatically because of excess supply. A strong North American new-housing market has boded well for manufacturers of value-added wood products. Producers of veneer and plywood, structural wood products, windows and doors have all reported significant gains in output since the start of this latest housing boom in mid-2001.