Saturday, March 2, 2024
HomeCANADACanadian Economy Grew By 0.1% In October: StatsCan

Canadian Economy Grew By 0.1% In October: StatsCan

Real gross domestic product (GDP) edged up (+0.1%) in October, following a +0.2% uptick in September. Growth in services-producing industries (+0.3%) was partially offset by a decline in goods-producing industries (-0.7%), as 11 of 20 industrial sectors increased in October.

Chart 1 
Real gross domestic product edges up in October

Chart 1: Real gross domestic product edges up in October

Advance information indicates that real GDP increased 0.1% in November. Increases in the utilities, wholesale, and finance and insurance sectors were partially offset by decreases in the construction, retail, and mining, quarrying, and oil and gas extraction sectors. Owing to its preliminary nature, these estimates will be updated on January 31, 2023 with the release of the official GDP data for November 2022.

Public sector and client-facing industries expand, while industrial activity contracts

Services-producing industries expanded in October, led by gains in the public sector, wholesale and client-facing industries. Services-producing industries have now increased for six consecutive months. Meanwhile, goods-producing industries cooled down in October, after expanding in the previous four months. The October decline was led by a decrease in mining, quarrying, and oil and gas extraction and weakening in the manufacturing sector.

Client-facing industries among the largest drivers of growth

Several client-facing sectors and subsectors such as air transportation, arts and entertainment and the accommodation and food services and drinking places sector expanded in October.

Arts, entertainment and recreation continues to perform well

The arts, entertainment and recreation sector increased 2.2% in October, up for the ninth month in a row.

The increase in October was led by performing arts, spectator sports and related industries, and heritage institutions (+4.7%). Growth was driven by more games being played by the Toronto Blue Jays than usual in October, with two playoff Wild Card games in addition to three regular season games, which were postponed from April to October. Moreover, a late start to the National Hockey League pre-season in September contributed to a higher than usual increase in attendance in October.

Accommodation and food services grow

The accommodation and food services sector rose 1.0% in October, the third consecutive monthly increase, as increased activity in food services and drinking places (+2.1%) more than offset a decline in accommodation services (-1.6%).

Transportation and warehousing keeps rolling

Transportation and warehousing rose 0.8% in October, following a 0.4% growth in September, as 8 of 10 subsectors were up.

Air transportation (+5.5%) rose sharply in October to the highest level of activity since February 2020’s pre-COVID-19 pandemic level as movements in domestic air carriers continued their recovery. Still, despite nine months of uninterrupted gains, air transportation’s activity level in October 2022 was about 34% below the pre-pandemic level.

Rail transportation increased 1.8% in October, more than offsetting a decline in September. Growth in grain, wheat, canola and fertilizer carloadings were a major contributor to the gain. The increase in fertilizer carloadings was associated with a strong seasonal demand and limited global supply due to the impact of Russia’s invasion of Ukraine.

Public sector continues widespread growth

The public sector (educational services, health care and social assistance, and public administration combined) expanded 0.4% in October, with notable growth widespread across industries.

Public administration (+0.6%) contributed the most to the growth in October, as most subsectors were up. The federal government public administration subsector led the growth, expanding 1.0%, up for the fifth time in six months. Activity rebounded from September’s decline when the funeral for Queen Elizabeth II was observed. In addition, local, municipal and regional public administration rose 0.3% in October as municipal elections were held in British Columbia, Ontario and Manitoba.

Health care and social assistance rose 0.3% in October with broad-based increases across all subsectors including hospitals (+0.5%), ambulatory health care services (+0.2%), nursing and residential care facilities (+0.2%), and social assistance (+0.3%). COVID-19, respiratory syncytial virus and flu cases created additional demand on the health care system.

Wholesale trade rebounds

Wholesale trade grew 1.3% in October, up for only the second time in five months. Nevertheless, activity rebounded to the highest level since February 2022, with eight of nine subsectors recording gains.

Personal and household goods wholesaling (+1.7%) contributed the most to the growth in October. The gain was led by pharmaceuticals and pharmacy supplies as higher sales of pharmaceutical products reflected the recent availability and authorization of COVID-19 vaccine boosters targeting the Omicron subvariants.

Building materials and supplies wholesalers also rose sharply, expanding 2.1% in October on higher activity in the lumber, millwork, hardware and other building supplies industry group.

Farm product wholesaling increased in October, spurred by an increase in wheat and canola exports. Conversely, the food, beverage and tobacco wholesaling products subsector declined after three consecutive monthly increases.

Mining, quarrying and oil and gas extraction contracts

The mining, quarrying and oil and gas extraction sector stepped back 1.6% in October.

Chart 2 
Mining, quarrying, and oil and gas extraction decreases in October

Chart 2: Mining, quarrying, and oil and gas extraction decreases in October

Oil and gas extraction contracted 2.0% in October, led by a decrease in oil sands extraction.

Oil sands extraction decreased 3.9% in October, with lower synthetic oil production in Alberta contributing the most to the decrease. Production was interrupted by the commencement of scheduled maintenance activity at some synthetic crude upgraders in Alberta. Still production levels of crude bitumen remained elevated in October.

Oil and gas extraction (except oil sands) increased 1.3% in October, as an increase in conventional crude petroleum extraction was partially offset by a decrease in natural gas extraction.

Mining and quarrying (except oil and gas) contracted 0.7% in October as a result of a decrease in metal ore mining.

All metal ore mining industries decreased, with the largest decline posted in copper, nickel, lead and zinc ore mining (-4.8%), followed by gold and silver ore mining (-2.1%).

Non-metallic mineral mining and quarrying tempered the decline in the subsector with a 2.4% increase in October. Non-metallic mineral mining production was led by potash mining (+4.7%), as exports of potash have increased stemming from Russia’s invasion of Ukraine and resulting in a higher demand for Canadian potash.

Manufacturing weakens, as declines in both durable and non-durable goods industries were observed

The manufacturing sector contracted 0.7% in October, the fourth decline in six months and the lowest activity level since December 2021, on declines in both durable and non-durable goods manufacturing.

Durable-goods manufacturing declined 1.1%, more than offsetting a 0.9% increase in September, as 5 of 10 subsectors contracted in October. Declines in fabricated metal product manufacturing (-4.7%) and machinery manufacturing (-2.9%) contributed the most to the contraction.

Non-durable goods manufacturing edged down 0.1% in October, the third straight monthly decline, as five of nine subsectors contracted. Food manufacturing (-0.9%) drove most of the decrease as growth in grain and oilseed milling was more than offset by a drop in seafood product preparation and packaging manufacturing.

- Advertisment -
Google search engine

Most Popular

Recent Comments