CA: Monthly GDP

January 31, 2017 07:30 CST

Consensus Actual Previous
Month over Month 0.3% 0.4% -0.3%
Year over Year 1.6% 1.5%

November monthly real gross domestic product rose for the fifth time in six months, up 0.4 percent on the month and above expectations for a 0.3 percent increase. The monthly increase came from higher output in manufacturing, mining, quarrying and oil & gas extraction, finance and insurance and construction. Utilities and the agriculture and forestry sectors declined. On the year, real GDP was up 1.6 percent.

Goods producing industries rose by 0.9 percent, almost offsetting a 1.0 percent decline in October. Service producing industries were up 0.2 percent, mainly due to finance & insurance, retail trade and transportation & warehousing. There was a decline in real estate and rental and leasing, while wholesale trade edged down. Manufacturing rebounded 1.4 percent following a 1.7 percent decline in October. With the exception of October, output in the manufacturing sector has risen every month since June.

Nondurable manufacturing was up 1.5 percent, led by a 3.6 percent gain in chemical manufacturers. Petroleum and coal products manufacturing increased following three consecutive declines, which were linked to partial shutdowns for maintenance and retooling work. Food manufacturers had higher output for the fourth time in five months. Durable manufacturing rose 1.3 percent, with the largest contributions coming from manufacturers of machinery, computer and electronic products and primary metals. There were declines in fabricated metal product, transportation equipment and miscellaneous manufacturing.

Mining, quarrying and oil & gas extraction expanded 1.4 percent. Mining excluding oil and gas extraction increased 2.9 percent. Metal ore (such as iron ore) and potash led the growth, driven in part by higher exports.

Gross domestic product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. In contrast to most industrialised countries a monthly estimate is provided derived from the value added by labour and capital in transforming inputs purchased from other producers into that industry's output. Data for the reference month are usually released close to the end of the second month after the reference period.

Instead of producing an advanced quarterly GDP figure and revising it the following two months, Statistics Canada releases monthly estimates of real GDP at Basic Prices. This release breaks down real output by seven goods-producing industries and twelve service-producing industries, and includes special aggregations such as business sector, non-business sector, and industrial production.

The sources of data used for monthly and quarterly estimates often differ and leads to very different estimates for certain items, such as price deflators. As a result, the monthly figures are not perfectly correlated with the quarterly numbers. However, the monthly data do give some idea of where the quarter is headed and especially in an uncertain environment, they are closely watched. While industrial production is closely watched in the U.S., it is not in Canada especially since the economy has become increasingly dominated by services. However, the goods sector is more vulnerable to wide swings in output compared to services, and exports remain dominated by industrial output.