Despite the ongoing oil slump, lower domestic demand and lower exports, Canada’s economy grew at an annualized rate of 0.8 per cent in the fourth quarter of 2015, Statistics Canada reports. This is a higher rate than economists had forecast, according to Thomson Reuters, and followed a 0.6 per cent increase in the third quarter. Real GDP increased by 1.2 per cent in 2015, about half the pace seen in the previous year.
Business investment was weak in the fourth quarter. Businesses invested 3.3 per cent less in non-residential structures and machinery, and 1.2 per cent less in mineral exploration and other intellectual property products.
Exports were also down 0.6 per cent in the fourth quarter, after gaining 2.6 per cent in the third. The greatest contributors to the decline were the aircraft and transportation equipment industries. Exports of energy products, and farm and fishing products were also down. A 4.6 per cent increase in the exports of passenger cars and light trucks helped put the motor vehicles and parts sector ahead by 1.7 per cent in the fourth quarter.
Looking at GDP by industry in the final month of 2015, Statistics Canada reports that manufacturing output rose 1.1 per cent in December, following an increase of 0.3 per cent in November. Gains were recorded in wood products, transportation equipment and miscellaneous manufacturing, while the manufacturing of metal products and machinery declined.
Wholesale trade grew 1.8 per cent in December, after a 1 per cent rise in November. Most trade subgroups posted growth. Cars and car parts, and building materials and supplies were the major contributors to December’s growth. However retail trade contracted by the same amount, 1.8 per cent, with notable declines reported by cars and parts dealers, clothing, food and beverages, and general merchandise. Overall, exports of goods were up 3.4 per cent and services up 0.9 per cent for 2015.
Energy and resource sectors also experienced contraction in December. The mining, quarrying, and oil and gas extraction sector dropped 0.7 per cent, though non-conventional oil extraction and conventional crude oil extraction were both up. Support activities in these industries suffered heavily, dropping 7.4 per cent in December.
The RBC Canadian Manufacturing Purchasing Managers’ Index released today shows that manufacturing business conditions edged up in February to a seasonally adjusted 49.4. The index was at 49.3 in January. The February reading is the highest since August, boosted by exports and the low Canadian dollar. A reading of 50 indicates growth.