MRO Magazine

GDP bounced back in April

Ottawa, ON -- Economic activity bounced back 0.4% in April 2004 after declining 0.1% in March, reports Statistics C...


Industry

July 11, 2005
By MRO Magazine

Ottawa, ON — Economic activity bounced back 0.4% in April 2004 after declining 0.1% in March, reports Statistics Canada.

Activity was boosted by a rebound in oil extraction, strike recovery in education and higher retail sales. A partial resumption of activity in the tar sands after first quarter production difficulties propelled oil extraction. The end of post-secondary student strikes in Quebec restored education services, while retail sales gained on the strength of new car sales.

Industrial production (the output of factories, mines and utilities) advanced 0.7% in April. Manufacturers’ output increased by 0.3% as wood products manufacturing recovered from a March decline. Mining and oil and gas extraction gained 2.4%, mostly due to oil extraction in the tar sands. Output of utilities decreased 0.3% as natural gas distribution dropped by 9.0% due to a warmer than usual April in most parts of Canada and the northern United States.

By comparison, the U.S. index of industrial production declined 0.3% due to decreases in manufacturing and utilities, while the mining sector edged up.

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Oil extraction resumes while mild weather reduces the demand for natural gas
Output in the mining and oil and gas extraction sector increased 2.4% in April, mostly due to a partial resumption of oil extraction in the tar sands area after a series of problems hampered production in the first quarter of 2005. The jump in crude petroleum production resulted in a 3.9% increase in the pipeline transportation of crude oil and other products. Oil and gas extraction jumped only 2.2% as natural gas extraction dipped slightly.

Milder than usual weather in April in most parts of the country and in the northern United States lowered the demand for natural gas and reduced the output of related activities, such as distribution (-9.0%) and pipeline transportation (-5.0%). The energy sector increased by 0.9% despite the general decrease in natural gas related industries. Output of the energy sector excluding these industries increased 2.6%.

Mining activity increased 3.7% on the strength of higher output by copper, nickel, lead and zinc ore mines (+9.5%) as other zinc mines replaced those that closed permanently in previous months. A strike brought iron ore mining down 17%. This industry also suffered from strike activity in 2004. The output of non-metallic mineral mines increased 5.7% in April.

Retailing activity gained 1.4% in April, boosted by new car sales. Activity in retail stores excluding new car dealerships was a robust 0.7%, with increases for many store types. The largest gains were in home centres and hardware stores, clothing stores, and furniture, home furnishings and electronics stores. The largest decreases were recorded in supermarkets and gas stations.

Wholesaling activity increased 0.3%, bolstered by sales of motor vehicle products, building products and miscellaneous products. Most wholesale trade groups however saw decreased activity in April, especially machinery and electronic equipment. Excluding motor vehicle products, wholesale trade fell 0.4%.

MANUFACTURING REGAINED SOME LOST GROUND

Manufacturing output increased 0.3% in April, regaining some of the ground lost in February and March. Of the 21 major groups, 13 advanced and they accounted for 58% of manufacturing output. Wood products rose 4.9%, pushed by a rebound in the output of sawmills after unfavourable weather and strike activity hampered West Coast production in March.

The manufacturing of machinery edged up 0.1%, restrained by a sharp decrease in general-purpose machinery (-5.7%). Excluding this industry, output of machinery increased 1.9%. There were widespread decreases in the manufacturing of chemicals (-1.2%), clothing (-6.2%), and paper products (-1.2%).

Motor vehicle manufacturing declined a further 2.6% while parts production increased 2.4%. Other notable increases were reported by manufacturers of aluminum (+3.8%), cement and concrete (+3.9%) and meat products (+2.9%).

Residential construction was down a further 0.9% in April marking a fourth consecutive monthly decline. Since the beginning of the year, residential construction activity has decreased 3.3%. In April, a decrease in the construction of single-detached dwellings more than offset an increase in multi-units structures. Nonetheless, housing starts increased in all urban areas except British Columbia, while the stock of newly completed but unoccupied apartments and row units continued to swell.

Non-residential building construction dipped by 0.1% in April. An increase in the construction of commercial structures was more than offset by decreases in industrial and institutional structures. The value of building permits issued however declined for commercial and institutional structures in April, while the value of industrial permits increased for the third month in a row.