MRO Magazine

Canadian manufacturing production dropped slightly in August

Ottawa, ON -- Real gross domestic product decreased 0.1% in August 2009 after being unchanged in July, Statist...


November 2, 2009
By MRO Magazine


Ottawa, ON — Real gross domestic product decreased 0.1% in August 2009 after being unchanged in July, Statistics Canada reports. Oil and gas extraction and, to a lesser extent, manufacturing were the main sources of the decline in August. Wholesale trade, agriculture and forestry also retreated. Conversely, increases in the public sector, utilities, retail trade and construction mitigated these declines.


Oil and gas extraction drops



Oil and gas extraction fell 2.3% in August, as maintenance work at some crude petroleum facilities on the East Coast slowed production. Natural gas production also retreated. However, support activities for mining and oil and gas extraction increased in August, but their level remained near half that of a year ago.


The output of the mining sector excluding oil and gas extraction declined 1.4% in August, with mixed results within the sector. Iron ore mining increased substantially (+44%) following the reopening of some mines. However, temporary closures led to a 9.1% drop in output for copper, nickel, lead and zinc mines.


Output of non-metallic mineral mines increased 0.3%, on the strength of potash, while miscellaneous non-metallic mineral mines (which include diamonds) decreased significantly.


The output of utilities increased 1.8%, as natural gas distribution and the production of electricity increased with the return of more seasonal temperatures, particularly in Central Canada.


Manufacturing output falls


Manufacturing activity decreased 0.7%, with 8 of the 21 major groups retreating. The drop in primary metal products accounted for much of the overall decline in the sector. Labour disputes were mostly behind the reduction in production of the sub-sector. Manufacturers of machinery and paper products, as well as printing and related support activities also reduced their production. Increases in the production of motor vehicles, food and wood products tempered the decrease in the manufacturing sector.


Wholesale trade retreats


The volume of wholesaling activity declined 0.5% in August, reflecting the weakness in foreign and domestic demand. All major wholesale trade groups retreated, with the exceptions of personal and household goods, and automotive products.


Increase in the public sector


Activity in the public sector (which includes education, health and public administration) increased 0.4%, largely as a result of the end of a strike by municipal employees in Toronto.


Retail trade increases


Value added in retail trade increased 0.3% in August. The volume of activity increased slightly among most types of retailers. New car dealers increased their activity after two monthly declines, as incentive programs may have bolstered sales.


Construction up slightly


Construction advanced 0.2% in August, the first increase since October 2008. A rise in engineering and repair work eclipsed reductions in both new residential and non-residential building construction. Residential alterations and improvement work advanced.


The level of activity of real estate agents and brokers remained high for a third consecutive month, following five months of strong growth.


Other industries


With the decrease in manufacturing and wholesaling activities, truck transportation receded in August. The finance and insurance sector decreased 0.1% in August, as lower credit intermediation and insurance services more than offset the increase in stock brokerage activities. Accommodation and food services advanced for a third consecutive month.


Data on gross domestic product by industry for September will be released on November 30, 2009.