Canadian GDP for natural resources sector down 0.4 percent in Q4

Tuesday, 26 March 2019 22:55:27 (GMT+3)   |   San Diego
       

According to Statistics Canada, real gross domestic product (GDP) of the natural resources sector decreased by 0.4 percent in the fourth quarter, following a 0.8 percent increase in the third quarter. By comparison, real GDP growth for the total economy slowed (+0.1 percent).

Real GDP in the energy subsector declined 0.3 percent in the fourth quarter, following three consecutive quarterly increases. Energy services fell 5.3 percent, coinciding with the announcement of temporary oil production cuts in Alberta, which took effect on January 1.

The mineral and mining subsector increased 1.4 percent following a 3.2 percent expansion in the third quarter. Services incidental to minerals and mining (+12.3 percent) led the increase, followed by metallic mineral extraction (+1.8 percent).

The value of natural resource activity, as measured by nominal GDP, fell 7.3 percent to $232.4 billion (nominal terms, at annual rates) in the fourth quarter. The energy subsector (-9.7 percent) accounted for most of the decline, due to sharply lower prices. Natural resources represented 11.2 percent of the total economy in the fourth quarter, down from 12.0 percent in the third quarter.

Real natural resource exports declined 1.5 percent in the fourth quarter, following a 4.0 percent increase in the third quarter. Lower exports were the result of less trade in the energy (-2.0 percent) and forestry (-6.8 percent) subsectors. However, mineral and mining exports (+1.6 percent) rose for the fourth consecutive quarter, led by coal (+23.7 percent) and non-metal minerals (+9.4 percent).

Secondary and tertiary processing for the forestry and minerals and mining subsectors are identified separately in the natural resource indicators for analytical purposes. An additional 1.7 percent of Canadian GDP is attributable to these downstream activities.

Real GDP of these downstream activities decreased 0.3 percent in the fourth quarter, following eight consecutive quarterly increases. Downstream activities in forestry declined 3.6 percent, while downstream mining activities increased 0.9 percent.

As for the full-year 2018, the natural resources sector expanded by 3.0 percent, outpacing growth in the total economy (+1.8 percent). The energy subsector was responsible for most of this growth, increasing 4.3 percent in 2018 with the majority of gains in the first half of the year. The share of the natural resources sector to total GDP grew from 10.9 percent in 2017 to 11.7 percent in 2018.

Prices rose in each natural resources subsector in 2018, up 8.1 percent overall. Energy prices rose 11.2 percent in 2018 on increases in the first three quarters of the year, despite large declines in the fourth quarter.

Natural resources exports grew 5.6 percent in 2018, on the strength of the energy (+7.1 percent) and the mineral and mining (+5.8 percent) subsectors. Real natural resources imports (+0.7 percent) also rose in 2018, on higher imports of energy products (+4.8 percent).


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