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Canadian economy stagnates in February, dragged down by the energy sector and automobile production

Published by Brad Fougere on April 30, 2015

Canadian economy stagnates in February, dragged down by the energy sector and automobile production

The Canadian economy continues to struggle out of the gate in 2015. After contracting by 0.2 per cent to start the year, it ran in place in February, with GDP essentially unchanged compared to January’s level. February marks the third time in the past four months that the Canadian economy has failed to post any gains.


Economic performance was mixed across Canada’s major industry sectors. Gainers included agriculture, finance, insurance and real estate, as well as retail trade and utilities. Increases in those sectors were offset by losses in transportation and warehousing, oil and gas, and durable goods manufacturing.

Manufacturing was a major contributor to Canada’s weak economic performance in February. GDP fell by 0.8 per cent that month, following a 0.7 per cent drop in January. However, compared to the same period last year, manufacturing continues to be one of Canada’s top-performing economic sectors. Through the first two months of 2015, manufacturing GDP is up 3.6 per cent over the same period last year – well above the national average of 2.3 per cent. Only the financial and insurance services industry has posted stronger year-over-year gains.


February’s decline in manufacturing GDP was felt across most major industry groupings, but heavily concentrated in motor vehicles production. GDP in motor vehicles and parts production fell by 7.6 per cent, reflecting in part the temporary closure of automobile production plants in Ontario for retooling.


On top of that, the impact of slower capital spending in the oil patch is beginning to filter through to Canadian manufacturers in the energy supply chain. Value-added output in primary metals was down 3.5 per cent in February, while fabricated metals GDP fell by 2.5 per cent. Petroleum refining also fell by 1.3 per cent.

Of Canada’s major manufacturing sub-sectors, only chemicals and food production saw positive growth in February. Fertilizer and pharmaceutical production drove chemicals GDP up 5.3 per cent compared to January, while food products manufacturers saw month-over-month gains of 1.8 per cent.

 

Found in: StatsCan

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