Photo by jacob earl
Let’s look at how Canada’s economy is developing in its main components.
Gross domestic product
The latest data about the Canadian GDP is from January 2011, when the real gross domestic product continued to expand, rising by 0.5%. The main contributors to the growth were manufacturing (+2.8%), the transportation and warehousing sector (+1.2%), wholesale trade (+0.7%), finance, the insurance and real estate sector (+0.5%), and construction (+0.4%).
There were losses in mining, oil and gas extraction, and retail sales. The seasonally adjusted real GDP in January was 1,259,184 million dollars. According to the Calgary Herald, the February figures will show that the national economy was treading water for the month. Expectations are for about zero to 0.1% growth. BMO Capital Markets economist Benjamin Reitzes noted that the positive momentum stopped dead in its tracks in February, with activity expected to remain flat. He also added that “earlier months were strong enough to push the annualized growth rate for the first quarter to 4%.”
Prices and inflation
Consumer prices grew by the largest year-over-year increase since September 2008, according to Statistics Canada. Energy prices increased by 12.8% during the 12 months to March, and gasoline prices increased by 18.9%, while prices for oil and other fuels increased by 31.3%, and electricity prices by 4.3%. The largest increase occurred in the transportation component of the Consumer Price Index, where prices rose by 6.6% in the 12 months leading up to March. Consumer prices grew faster in every province in March compared to February. Mortgage interest costs and natural gas prices declined.
The inflation, the rate of increase of a consumer price index, was 3.3% in the 12 months leading up to March, while February’s inflation was only 2.2%. Excluding energy, CPI rose by 2.4%. The highest inflation for this period was in Novia Scotia and the lowest in Alberta.
Export and import
Canada’s economy is dependent on international trade, which accounts for 59% of its activity. Although the United States remains Canada’s biggest trading partner, the latter’s trade relations with several Asian and European nations have also improved in recent years. International trade was balanced in February. Canadian export was $35.9 billion and import was $35.8 billion. The year-to-year change in export was 7.7% and the change in import was 9.1%.
According to the Canada Mortgage and Housing Corporation (CMHC), the annual rate of Canadian housing starts was 188,800 units in March, increased by 0.02% from February. Housing starts rose, mostly because of growth in rural starts. “Urban starts saw little change as the increase in Ontario’s multiples segment was offset by a decrease in British Columbia’s multiples and a decrease in single housing starts in the Prairies,” said Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre. March’s rural starts increased by 0.4% to 163,500 units. Alberta’s housing starts declined by 0.9% in March to 23,200 units, and on a year-over-year basis, housing starts in Alberta were down 32.8%, according to an Alberta Finance review. CMHC expects that housing starts will moderate in all areas of Canada except British Columbia and Alberta. In Alberta, starts will remain steady in 2011 and increase in 2012.
Because the higher number of full-time work (+91,000) was offset by declines in part-time work (-92,000), overall employment was unchanged in March. The unemployment rate was 7.7%. Over the past 12 months, employment grew by 1.8% (+305,000). The employment gains were in accommodation and food services (+36,000) and construction (+24,000). Employment losses were in health care and social assistance (-17,000) and in public administration (-13,000). Over the past 12 months, employment in these industries increased by 2.9% and 2.1%, respectively. Employment increased for men aged 25 and over, but declined among youths aged 15 to 24 and women older than 55. In Alberta, with its population of 2,990,100 and labour force of 2,188,500, 2,064,300 citizens were employed in March, with 124,200 unemployed. The employment rate was 69.0, a year-to-year increase of 1.3%.