MRO Magazine

Canada’s GDP growth mostly on upside, manufacturing remains stable

Ottawa, ON -- Canada's economic activity increased 0.2% in July 2006 after remaining stable in June, reports Statis...


October 4, 2006
By MRO Magazine

Ottawa, ON — Canada’s economic activity increased 0.2% in July 2006 after remaining stable in June, reports Statistics Canada in its latest analysis of Gross Domestic Product (GDP). Growth was registered in both goods and service industries. The energy, wholesale trade, retail trade and financial services sectors were especially robust. The construction and forestry sectors declined for a third consecutive month, while manufacturing output was essentially unchanged.

The energy sector grew 1.3% in July, its first gain since March. Despite the prolonged closure of some sites, oil extraction increased substantially on sites that were operating, both on the East Coast and in the oil sands. Pipeline transportation also posted strong growth. Natural gas production and transportation declined as a result of sizable reserves and weaker prices.

For a second consecutive month, oil and gas exploration also recorded a sizable increase following two months of steep declines. Electricity production and natural gas distribution both grew, stimulated in part by increased demand for air conditioning.

The production of the mining sector excluding oil and natural gas advanced 2.4% on the strength of coal and potash, as an agreement was reached with China on potash exports.



Wholesale trade grew 1.0% in July. Sales of automotive products and of computers and electronic equipment contributed the most to this increase. On the other hand, reflecting the slowdown in the construction sector, wholesalers of metal, wood, and building products saw their activities slacken. Retail trade advanced 0.4%, benefiting from the return of some incentive programs for the purchase of new vehicles and an increase in used vehicle dealers’ sales. Meanwhile, sales of clothing and accessory stores as well as home centres and hardware stores were down from the previous month.


Activities in the finance and insurance sector grew by a hefty 0.8% in July. Brokerage activity increased due to the higher than normal volume of securities transactions. Banking activities also advanced. In the wake of the previous two months, real estate brokerage services lost ground in July (-1.4%), reflecting the slowdown observed in the existing home resale market.


Activity in the manufacturing sector remained essentially the same as in June. This sector has been showing signs of weakness since the start of the year. Of the 21 major groups, 10 were up, accounting for 44% of total manufacturing output. The gains were mainly registered in the production of durables, led by machinery, wood and primary metal products manufacturing. The largest declines were recorded in the manufacturing of motor vehicles and parts as well as in plastics and rubber products.

Industrial production (the output of mines, utilities and factories) grew 0.5% in July, led by the strong advance of the mining and oil and gas extraction sector (+1.8%). In the United States, industrial production rose 0.4%, with manufacturing, mining and utilities all showing strength.


For a third consecutive month, the construction sector declined in July (-0.2%), pulled down by a 1.1% drop in residential construction. The drop was especially steep in the construction of single-family homes, while that of apartment units continued to advance. Non-residential building construction fell 0.4%. The drop in the construction of industrial buildings was partly offset by the gain observed in the construction of commercial buildings. Engineering and repair works also advanced, tempering the declines.