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Manufacturing growth on pace to grow 3 per cent this year

Published by Brad Fougere on October 31, 2014

In spite of a decline in August, the manufacturing sector is still on track to post its best economic performance since 2008.

August’s economic numbers for manufacturing essentially offset the sector’s excellent performance in July, leaving manufacturing GDP at about the same level as it was in June. However, strong gains earlier in the year leave the manufacturing sector in a strong position relative to last year – manufacturing GDP in August was 4.2% higher than the same month last year, compared to 2.2% for the Canadian economy as a whole.

In July, the manufacturing sector managed to keep the Canadian economy in positive territory, as a 1.2% spike in manufacturing GDP was enough to help the overall economy eke out a 0.03% gain. In August, however, manufacturing GDP fell by 1.2%, contributing to a 0.1% loss in aggregate economic growth.

August’s drop notwithstanding, the manufacturing sector is still on pace to grow by 3.0% for the year, well above the all-industry average of 2.3%.  

The decline in manufacturing GDP in August was felt across most major industry groupings, but particularly in the motor vehicle and parts subsector, where GDP fell by 3.8% compared to July. Vehicle and parts manufacturers have endured a lot of volatility in the past few months, with large spikes in output in May and July being offset by equally large drops in June and August. August also saw notable declines in GDP in plastics and rubber products manufacturing, as well as aerospace, food and wood products.

The lone bright spot in August was in fabricated metal products, where economic growth measured 3.3% over July levels. Thanks to that jump, every major manufacturing sub-sector in Canada is now in a position where economic output in 2014 is higher than it was last year.

Found in: gdp

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