The Canadian government is busy cutting programs and jobs and laying off some 18,000 civil servants. No surprise the economy is shrinking in response to this foolish ideologically inspired austerity. The central bank has made noises about raising interest rates. If the Governor of the Bank of Canada has any brains he will avoid doing this for some time to come.
I reproduce below courtesy of Statistics Canada, an excellent agency which itself has been negatively affected by job cuts, their most recent report on the GDP.
Real gross domestic product declined 0.2% in February. Temporary closures in mining and other goods-producing industries contributed to the decline. Decreases in mining and oil and gas extraction, manufacturing, utilities as well as forestry and logging outpaced advances in construction. In service-producing industries, gains in wholesale trade and in the finance and insurance sector outweighed declines in retail trade and in the transportation and warehousing sector.
Real gross domestic product decreases in February
Mining and oil and gas extraction falls
Mining and oil and gas extraction fell 1.6% in February following a small decrease in January and a 2.0% increase in December. Excluding oil and gas extraction, mining declined 7.0% in February, as output at potash and nickel mines was reduced by temporary shutdowns. Potash mining was down 19% as a result of the closure of mines in Saskatchewan in response to weak world demand. Copper, nickel, lead and zinc mining declined 9.9% as several nickel mines in Ontario, which also produce copper and precious metals, were closed for safety issues in early February.
Mining output declines in February
Oil and gas extraction decreased 0.9%. Crude petroleum production declined partly as a result of unplanned maintenance activities in Alberta. Natural gas production was also down. Storage levels of natural gas remained high in February. Support activities for mining and oil and gas extraction increased 1.6%.
Manufacturing declined 1.2% in February after increasing for five consecutive months. Non-durable goods manufacturing decreased 1.4% on reduced output of food, chemical, and plastic and rubber products. Durable goods production fell 0.9% as lower output in transportation equipment and primary metal manufacturing more than offset increases in non-metallic mineral products and machinery manufacturing.
The output of utilities decreased 1.9% in February, partly as a result of unseasonably warm weather leading to lower demand for electricity and natural gas. Output of electricity was also lowered by planned maintenance activities at some facilities.
Construction and home resale market up
Construction rose 0.5% in February with increases in residential and non-residential building construction as well as in engineering and repair work. The output of real estate agents and brokers increased 1.1% in February on increased activity in the home resale market.
Wholesale trade increases while retail is down
Wholesale trade (+1.5%) increased in February for a third month in a row, on the strength of wholesaling of building materials, motor vehicles and parts, machinery and equipment as well as personal and household goods. In contrast, wholesaling of petroleum and farm products declined.
Retail trade (-0.4%) decreased for a second consecutive month. The decrease was led by a decline in activities at new car dealers, which experienced a notable increase in January. Excluding new car dealers, retail trade edged down 0.1% in February. Decreases at food and beverage stores, health and personal care stores as well as electronics and appliance stores outweighed increases at building materials stores, clothing stores and general merchandise stores.
Transportation and warehousing services decline
Transportation and warehousing services declined 0.9%, as trucking and support activities for transportation were affected by the weakness in other industries.
The finance and insurance sector rose
The finance and insurance sector rose 0.5%. Management activity of mutual funds, residential mortgages and personal loans as well as the brokerage of securities increased. The output of insurance carriers was also up.
The public sector (education, health and public administration combined) was unchanged in February as gains in health services were offset by decreases in education services and public administration.
Forestry and logging as well as accommodation and food services declined.
Main industrial sectors’ contribution to the percent change in gross domestic product, February 2012
Note to readers
The monthly gross domestic product (GDP) by industry data at basic prices are chained volume estimates with 2002 as the reference year. This means that the data for each industry and each aggregate are obtained from a chained volume index multiplied by the industry’s value added in 2002. For the 1997 to 2008 period, the monthly data are benchmarked to annually chained Fisher volume indexes of GDP obtained from the constant-price input-output tables.
For the period starting with January 2009, the data are derived by chaining a fixed-weight Laspeyres volume index to the prior period. The fixed weights are 2008 industry prices.
This approach makes the monthly GDP by industry data more comparable with the expenditure-based GDP data, chained quarterly.