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TRENDS
Manufacturing accounts for 18% of Canada's Gross Domestic Product, a measure of total output or value added in the Canadian economy. Manufacturing makes the largest direct contribution of any economic sector representing 22% of Canada's total business activity.
Slightly more than half of Canada's manufacturing output is generated in Ontario. Quebec accounts for another 27% of total production. The western provinces produce 18% and the Atlantic provinces 5% of manufactured goods.
Manufacturing plays a leading role in provincial economies across the country. It directly accounts for more than 20% of economic activity in Ontario and Quebec.
As a source of demand for goods and services from other business sectors, manufacturing also makes a significant indirect contribution to the Canadian economy. Every dollar of manufactured output generates an average $3.05 in total economic activity in Canada. The economic spin-offs are even higher in Ontario, Alberta, Saskatchewan, New Brunswick, Nova Scotia and PEI.
The value of manufactured shipments has increased by 83% since 1990, reflecting an increase in production volumes and selling prices. Manufacturing production has grown by more than 50% since 1990. (Production volumes reflect value added by Canadian manufacturers after discounting for price changes.) Manufacturing has grown 16% faster than the Canadian economy over the 13 years.
Approximately 2.3 million Canadians are employed in manufacturing-about 15% of total employment. Manufacturing employment has increased rapidly since 1993. Over 500,000 more Canadians are employed in manufacturing today than 10 years ago.
Commodity Prices: Steady Strength
RBC's commodity price index rose 1.8% to 140.29 in March from the previous month. The overall index is up 14.5% on a year-over-year basis.
Three of the four sub-indexes registered gains - the metals sub-index was the only laggard. Metal prices fell 1.3%, but are still up almost 35% on a year-over-year basis. Of the three indexes that rose in March, agricultural products prices led the way, climbing 4.7%. Energy products were up 3.1% and forestry products squeaked out a small gain of 0.5%.
On a year-over-year basis, the forestry products index - up 43.5% - has increased the most. RBC's commodity price index and sub-indexes are denominated in U.S. dollars and weighted by major Canadian commodity exports.
Despite large gains in copper and platinum prices, the metals sub-index fell in March. Copper prices rose 9% and are up more than 81% year-over-year, while platinum prices were up 6.4% and have climbed 33.2% year-over-year. Declines in aluminum and nickel prices accounted for the fall in metals prices in March. Aluminum prices have the heaviest weighting in the sub-index and fell 1.7%. Nickel prices fell 8.7%, but are still up 65.3% year-over-year.
Energy prices got a strong lift in March from oil prices, which rose 6.4%. OPEC ministers met on March 31 and noted that higher oil prices were predominantly a consequence of long positions from market speculators rather than a pure reflection of supply and demand fundamentals. Their next meeting will take place in June and they will continue to monitor market developments.
In the agricultural products sub-index, cattle prices declined 12.6% in March, but the fall-off was not enough to drag the sub-index lower. Barley and canola prices lifted the sub-index higher, rising 9.5% and 7.8% respectively. Hogs and wheat prices were also up. Forestry products have been on a tear lately, but managed only a small gain in March, thanks largely to higher pulp prices, up 3.3%. Newsprint prices rose 1.3% and lumber prices fell slightly by 0.1%.
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