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News & Press: Industry News

Manufacturing helps drive the Canadian economy forward in April

Friday, July 8, 2016   (0 Comments)
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The Canadian economy returned to positive growth in April thanks in part to a solid recovery in manufacturing. Overall, GDP rose by 0.12 per cent in April after two consecutive months of decline. That increase comes in spite of yet another sharp drop in mining and energy extraction which fell by 1.4 per cent compared to March.

Manufacturing GDP by Major Industry




Mar-16

Apr-16

Mar-Apr

Apr 2015 - Apr 2016


($billions)

($billions)

% growth

% growth

Total Manufacturing

175.1

175.8

0.4

1.4

Durables

100.1

100.1

0.0

-0.8

Non-durables

75.0

75.7

0.9

4.2






Major Industries





Food

23.6

23.5

-0.1

3.9

Motor vehicles and parts

18.3

18.9

3.7

13.4

Chemicals

14.5

14.9

2.3

7.3

Primary metals

13.8

14.1

2.6

11.1

Machinery

13.2

12.6

-4.9

-12.9

Fabricated metals

12.1

12.1

-0.8

-6.6

Wood products

10.1

9.8

-3.4

4.9

Plastics and rubber prods.

9.7

9.4

-3.8

-3.1

Paper products

7.7

7.7

-0.6

4.2

Petroleum and coal prods.

6.5

7.0

6.3

12.9

Aerospace

6.7

6.6

-1.5

-10.3

Through four months, Canada is looking at yet another year of modest growth. From January through April, GDP is sitting about 1.4 per cent higher compared to the same period last year.

These numbers will change dramatically, however, when figures for May are released. The wildfires that swept through the Ft. McMurray area that month had a significant impact on energy extraction and other business activity in the region. As one of Canada’s most important economic engines, the shutdown of regular operations in the oil sands are certain to drive the Canadian economy sharply into negative territory in May.

Economic growth in April was broad-based, with eleven of the fifteen major economic sectors posting gains.  Leading the way was the utilities sector, where GDP growth came in at 1.9 per cent for the month on the strength of a surge in electricity generation, transmission and distribution, as well as natural gas distribution. Other leading drivers of economic growth in April included the public sector (0.46 per cent), manufacturing (0.42 per cent) and finance, insurance and real estate industries (0.42 per cent). 

As noted above, these gains were largely offset by another steep decline in energy and mineral extraction GDP. The 1.4 per cent contraction in April was largely concentrated in non-conventional oil extraction and builds on large drops in both March (2.7 per cent) and February (1.2 per cent). May’s numbers will be even worse when the impact of the forest fires on oil sands operations comes into play.

Aside from resource extraction, GDP in April was also lower in agriculture, health care and miscellaneous services. Construction activity was also essentially flat for the month.

For its part, manufacturing enjoyed a solid month in April, posting its best month-over-month growth rate since December. However, because of declines in February and March, GDP in manufacturing remains about 0.7 per cent below January’s levels. 

April’s gains were heavily concentrated in a small number of key industries. Of the eleven largest manufacturing industries in Canada, only four posted gains with the rest all to the down side. Leading the way was a surge in petroleum refining which, thanks in part to higher oil prices, was up 6.3 per cent compared to March.  After two poor months, motor vehicles producers saw a recovery as well, with GDP growth coming in at 3.7 per cent. Primary metals (2.6 per cent) and chemicals (2.3 per cent) production was also higher.

Strong growth in those four industries was enough to offset weakness elsewhere. There were widespread declines in machinery production, which fell 4.9 per cent, while plastics and rubber output (-3.8 per cent), wood products (3.4 per cent) and aerospace (1.5 per cent) were all sharply power.

 

www.manufacturingourfuture.ca

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