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National economy pulls back in February

National economy pulls back in February

Posted on: 5/1/2019 | Author: ATB Financial's Economics + Research Team

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The Canadian economy showed some weakness in February with real GDP contracting by 0.1 per cent. The decrease comes after a 0.3 per cent increase in January. (Monthly GDP figures are adjusted to take into account seasonal variations.)

Statistics Canada does not publish monthly GDP statistics by province so we cannot isolate how Alberta is doing. We can, however, zero-in on a sector of particular importance to our province: oil and gas. 

The oil and gas extraction sector, which accounted for 5.4 per cent of Canada’s GDP in February, decreased by 0.3 per cent in February after also contracting in January by 2.6 per cent. The oil production cuts imposed, and subsequently eased, by the Government of Alberta are a factor in these fluctuations.

It is important to keep in mind here that real GDP is a measure of the volume of economic output rather than its current (nominal) value. Prices are kept constant so the improvement in the price of Alberta oil that has taken place since late 2018 is not directly captured by these statistics.

Other national sectors that were down in February include mining (-4.4 per cent), food manufacturing (-2.3 per cent) and transportation and warehousing (-1.6 per cent). Sectors that saw improvement include petroleum and coal production manufacturing (+3.2 per cent), natural gas distribution (+1.8 per cent) and electric power (+1.6 per cent).

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