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March 31, 2021CANADA GDP BY INDUSTRY, JANUARY 2021 Real Gross Domestic Product (GDP) in Canada increased 0.7% in January 2021, following 0.1% growth recorded in December. Gains in both goods-producing and services-producing industries supported the increase in January. While this was the ninth consecutive month-over-month increase, Canadian economic activity was about 3.0% below the pre-pandemic level observed in February 2020.
The Canadian economy was 2.3% smaller when compared to January 2020 with an annualized value of $1,950 billion (chained 2012 dollars) in January 2021.
Statistics Canada’s preliminary estimate for real GDP points to an approximate 0.5% increase in February 2021, supported by increases in retail trade, construction, and real estate and rental and leasing. The official GDP data for February 2021 will be published on April 30, 2021.
Goods-Producing Industries
Goods-producing sector output increased 1.5% month-over-month in January. Activity in all sub-sectors except agriculture, forestry, fishing and hunting, and utilities were up in January.
The mining, quarrying, and oil and gas extraction sector grew 2.7% in January, posting the fifth consecutive monthly gain. Oil and gas extraction was up 2.1% in January, supported by production increases in Alberta.
The manufacturing sector output increased 1.9% in January following a 0.7% decline recorded in December. Increases in sales and inventory supported higher output in both durable and non-durable manufacturing in January.
Durable manufacturing output increased 2.9% posting the largest growth since August 2020. January’s gain was supported by higher activity in fabricated metal product (+4.7%) and machinery (+4.4%). Wood product manufacturing was up 4.1% as all industries were up supported by higher prices for their products and increased demand both domestically and internationally.
Non-durable manufacturing output increased 0.7% in January. The increase was led by plastics and rubber products (+8.7%), chemical (+0.8%), and food (+0.4%) manufacturing, while paper manufacturing (-2.7%), printing and related support activities (-5.4%), and petroleum and coal product manufacturing (-1.8%) partially offset the declines.
Construction GDP increased 1.4% in January following a 1.1% gain in the previous month. Residential construction which has been on the rise since May 2020 increased 3.1% in January. The gains in repair activities (+1.4%) and non-residential construction (+0.1%) were partially offset by the decline in engineering and other construction activities (-0.2%).
Utilities sector’s output declined o.8% in January. Statistics Canada noted that lower electric power generation, transmission and distribution (-0.9%) and natural gas distribution (-0.2%) contributed to the decline in January.
Services-Producing Industries
Output of services-producing sector increased 0.4% in January 2021.
Wholesale trade sector GDP increased 3.9% in January, supported by gains in eight of nine subsectors. Machinery, equipment and supplies wholesaling (+8.2%) led the increase due to higher imports in all types of machinery. Building material and supplies wholesaling output was up 9.6%, benefiting from increased construction activity, while food, beverage and tobacco wholesaling rose 1.5%. Personal and household goods wholesale declined 1.6%, posting the second consecutive monthly decline.
Retail trade sector’s output decreased 1.7% in January on continued COVID-19 related lockdowns and restrictions. Activity declined in clothing and clothing accessories (-17.0%) and furniture and home furnishings stores (-12.8%). General merchandise stores increased 3.3%, while building material and garden equipment and supplies dealers were up 3.6%, benefiting from continued growth in home renovation and improvement activity.
Activity in finance and insurance sector increased 0.8% in January, led by the growth in banking, monetary authorities and other depository credit intermediation (+1.0%). According to the Statistics Canada, this gain was mainly supported by a 7.1% year-over-year increase in households’ overall mortgage debt.
Activity in accommodation and food services declined 3.0% in January, following a 6.7% decline recorded in the previous month. Continued containment measures caused activity in food services and drinking places (-3.1%) and accommodation services (-2.7%) to decline.
Transportation activity was down 0.7% in January, mainly due to lower activity in urban transit systems (-28.0%). Truck transportation (-1.4%) and postal services and couriers and messengers (-2.4%) also posted declines in the month, while rail transportation (+3.7%), support activities for transportation (+0.9%) and pipeline transportation (+1.0%) were up.
Year-Over-Year (January 2021 vs January 2020)
The Canadian economy was 2.3% lower when compared to the previous year in January 2021.
Amid the COVID-19 pandemic and economic recovery, the largest declines in activity have been in arts, entertainment and recreation (-51.5%), accommodation and food services (-42.2%) and management of companies and enterprises (-20.0%). Activity increased in agriculture, forestry, fishing and hunting (+12.1%), wholesale trade (+5.0%), finance and insurance (+4.7%) and real estate and rental and leasing (+3.8%) from the same period last year.
Source: Statistics Canada, Table 36-10-0434-01 Gross domestic product (GDP) at basic prices, by industry, monthly (x 1,000,000)
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