Issue 16-228: Gross Domestic Product (GDP)

December 1, 2016

Monthly GDP

Canadian real GDP by industry at basic prices (seasonally adjusted) advanced 0.3% in September following three consecutive monthly increases in June (+0.6%), July (+0.5%) and August (+0.2%).

The continued economic growth was largely due to ongoing gains in the goods-producing industries, which expanded 1.1% in September, led by a 2.7% increase in mining, quarrying and oil & gas extraction. Oil & gas extraction continued to recover (+3.8%) while support activities for mining and oil & gas extraction were up 5.0%. However, mining & quarrying contracted 2.0%.

Aside from the resource sector, construction rose 0.7%, following four consecutive monthly declines. A 1.7% rebound in residential construction was the major contributor to the increase. Agriculture, forestry, fishing & hunting (+0.6%) and manufacturing (+0.5%) advanced, but utilities (-0.2%) declined.

Growth in the service industries remained lackluster, with real GDP inching up just 0.1% in September. The relatively slow growth was largely due to a 1.3% decline in wholesale trade, together with continued weak growth in retail trade (+0.1%). Declines in information & cultural services (-0.9%) and finance & insurance (-0.2%) also offset advances in other service industries including arts, entertainment & recreation (+1.5%), professional services (+0.4%), the public sector (including education, health and public administration +0.3%) and real estate & rental & leasing (+0.2%).

Quarterly GDP

The Canadian economy bounced back from a second-quarter slowdown (-0.3%), expanding 0.9% (seasonally adjusted, chained 2007 dollars) in the third quarter.

The GDP growth was boosted by international trade, as exports of goods and services recovered (+2.2%) from a second-quarter slump (-3.9%). Exports rose at a faster pace than Canadian demand for goods and services from outside the country (+ 0.8%).

Final domestic demand (spending by households, businesses, non-profit organizations and governments) grew (+0.2%), but at a slower pace than in the second quarter (when final domestic demand was up 0.5%). Household final consumption of goods and services (+0.6%) remained the key factor contributing to overall growth in domestic demand. However, while household spending on services (+0.9%), non-durable (+0.7%) and semi-durable (+0.5%) goods was robust, purchases of durable goods fell (-0.6%) for a second straight quarter.

Government final consumption expenditures slipped (-0.3%) but spending by non-profit institutions was up 1.0% over second quarter levels. Business investment in fixed capital (-0.5%) shrank for an eighth straight quarter as investment in residential structures (-1.4%), machinery and equipment (-3.2%) and intellectual property products, which includes exploration and development activities, (-4.5%) all declined. Meanwhile, business investment in non-residential structures advanced for the first time in two years, partly offsetting the effect of the slowdown in other business investment spending. Government spending on fixed capital was also up (+0.6%), while the value of inventories held by businesses increased by $4.6 billion in the third quarter.

Data Source: Statistics Canada