Manufacturing sector helped boost GDP in July
Ottawa, ON -- The economy edged up 0.1% in July 2004 after posting a solid 0.4% gain in June, reports Statistics Ca...
Ottawa, ON — The economy edged up 0.1% in July 2004 after posting a solid 0.4% gain in June, reports Statistics Canada. The goods producing sector has been the main source of growth over the past three months.
Canada’s gross domestic product (GDP) got a boost in July from the manufacturing sector, wholesale and retail trade sectors, and financial services sector. The oil patch, construction, and travel and tourism related services, held the reins on economic expansion.
Industrial production (the output of Canada’s factories, mines and utilities) was up 0.3% in July. All components were up: manufacturing (+0.3%), mining (+0.2%), and utilities (+0.8%).
South of the border, the US Index of Industrial Production indicated growth of 0.6% in July led by the manufacturing and mining sectors.
Manufacturing sector continues to expand
Output in the Canadian manufacturing sector was up 0.3% in July after a 1.6% export driven surge in June. Growth in manufacturing output was concentrated in wood products, fabricated metals, chemicals, information and communication technologies (ICT) products, and motor vehicles.
Growth was more concentrated than in June, as production was higher in only 11 of the 21 major groups. Sawmills were buzzing with production up 2.8% in July. Forestry and logging operations were also higher. Lumber products were mostly exported to the United States to satisfy the continuing demand for housing. There were significant declines in the fabrication of textiles, petroleum products and non-metallic minerals.
The manufacturing of fabricated metals increased 1.3% with strong export demand for certain products. A 1.3% rise in the production of chemicals was mostly attributable to a 3.5% jump in pharmaceuticals.
Manufacturers of ICT equipment had a good month (+2.6%), led by strength in the fabrication of semi-conductors, wireless communications and other electronic equipment.
Automobile and light truck production jumped 3.9% on the heels of a 2.2% increase in June, as exports to the United States remained strong. Some Canadian auto manufacturers lengthened summer shutdowns to reduce the building level of inventories for some models of cars and trucks. Manufacturing of auto parts fell 1.1%, marking a fourth consecutive monthly decline. Fabrication of heavy duty trucks declined 15% in July because of scheduled plant shutdowns.
Wholesalers and retailers post a good month
Wholesaling activity was up 0.6% following a 1.4% jump in June. The July increase was spurred by higher sales of grains and building materials.
Mining, oil and gas sector mixed
Output in the mining, oil and gas sector edged up 0.2% after declining 0.8% in June. High crude oil prices did little to stimulate activity as both oil and gas extraction and drilling activities were lower in July.
Metal ore mining fell as extraction of iron ore plummeted 24% as a result of labour disruptions. The mining of copper, lead, zinc and nickel was up 5.5% as the demand from China for refined copper surged. The 5.7% jump in non-metallic minerals was once again mainly due to diamonds and potash.
The output of utilities was up 0.8% as both the generation of electricity and the distribution of natural gas returned to normal levels after a decline in June.