MRO Magazine

GDP grows in October thanks to manufacturing

Ottawa, ON -- Gross domestic product (GDP) grew 0.2% in October 2005 after a pause in September, mostly because of ...


Industry

December 28, 2005
By MRO Magazine
MRO Magazine

Ottawa, ON — Gross domestic product (GDP) grew 0.2% in October 2005 after a pause in September, mostly because of a rebound in manufacturing output, says Statistics Canada.

Strength in the goods-producing sector was concentrated in manufacturing, notably the production of motor vehicles.

Output in the mining, oil and gas extraction sector decreased after a strong showing in September. Growth in the service sector was stimulated by both retail and wholesale trade, particularly as new motor vehicle sales gained momentum. A strike by British Columbia teachers, however, hampered growth in the service sector.

Industrial production (the output of Canada’s factories, mines and utilities) expanded by 0.4% in October on the strength of manufacturing (+1.0%) while declines in the mining, oil and gas sector (-0.9%) and utilities (-1.2%) partially offset this increase.

Advertisment

Manufacturing output grew 1.0%. Production increased in 14 of the 21 major groups, accounting for 72% of this sector’s output.

The largest increases were recorded by manufacturers of transportation equipment (+3.7%), machinery (+3.8%), chemicals (+1.5%) and furniture and related products (+3.4%).

Manufacturers of chemical products raised their output to satisfy demand in the United States where supply is tight. Among other manufacturing goods, food (-2.4%) and sawmills products (-2.8%) recorded the largest declines.

Wholesale trade activity increased 1.0% in October. For a third consecutive month, wholesalers of motor vehicles contributed to this strength. Other wholesaling activities, however, also played a key role.

Excluding motor vehicles and parts, wholesale trade grew 0.8%, mostly from sales of machinery, computer and other electronic equipment and household and personal products.

Wholesalers of farm products increased their output significantly for a third consecutive month with the re-opening of the U.S. border to Canadian livestock.

The energy sector edged down 0.3% in October. The decline in output was driven by lower oil and gas exploration (-2.7%) as well as by warm weather conditions in October, which contributed to a 1.2% reduction in the generation of electricity and a 2.8% decline in the distribution of natural gas.

However, oil and gas extraction rose 0.6%. Growth in output of crude petroleum was partially offset by a decline in natural gas. The end of maintenance work on the East Coast, as well as robust growth in the Alberta tar sands, contributed to that increase.

Mining activity, however, declined a marked 5.6%. Output of base metals dropped 8.4%, partly as a result of strike activities. Non-metallic mineral mines, which include diamonds and potash, also contributed to this drop, declining 7.5%.

The transportation and warehousing sector retreated 0.3% on the weakness of most types of transportation activities. Warehousing and storage activities declined 1.7%, as warehousing of farm products fell markedly.