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GDP
Goods-Producing Industries (NAICS 11-33)
Under this topic you will find information on Gross Domestic Product (GDP) levels and growth for the Goods-Producing Industries (NAICS 11-33) in Canada. You can use this information to assess the general health of these sectors and to identify trends in their growth.
- Comparing GDP Growth in Goods-Producing vs Services-Producing Industries
- GDP and Growth in Goods-Producing Industries
- Important Notes on Gross Domestic Product Data
- Understanding GDP and Value-Added
- Understanding GDP and Economic Growth
Comparing GDP Growth in Goods-Producing vs
Services-Producing Industries
The graph below illustrates growth in GDP for the goods and services producing industries between 2002 and 2011.
Growth in Gross Domestic Product (GDP): 2002-2011
Goods-Producing vs Services-Producing Industries
Source: Statistics Canada, Gross Domestic Product by Industry, 2002 to 2011.
Between 2002 and 2011, GDP for the Canadian economy grew at annual rate (CAGR) of 1.9% per year. The goods-producing industries increased at a rate of 0.6%, while the services-producing industries show an increase in GDP of 2.6% per year.
In 2011, annual GDP for the Canadian economy (not shown) decreased from 3.3% to 2.6%. The chart above illustrates that the performance of the goods-producing segment of the economy in 2011 (3.6%) declined from the previous year (4.9%), despite the enormous economic rebound the sector experienced from 2009 (-9.9%). The services-producing industries dropped from 2.6% to 2.2%, from 2010 to 2011.
GDP and Growth in Goods-Producing Industries
The table below shows GDP chained-dollar levels as well as short and long-term GDP growth rates for each goods-producing sector of the Canadian economy.
| NAICS Code |
Sector | GDP* (millions of chained 2002 dollars) | CAGR** 2002-2011 |
% Change 2010-2011 |
|
|---|---|---|---|---|---|
| 2002 | 2011 | ||||
|
*GDP is expressed in chained 2002 dollars in order to maintain accurate growth rates. Chained levels are non-additive, therefore sector values will not add up to the value for the Canadian economy. **Compound annual growth rate. Source: Statistics Canada, Gross Domestic Product by Industry, 2002 to 2011. |
|||||
| 11 | Agriculture, Forestry, Fishing and Hunting | 23,293 | 29,093 | 2.5% | 2.1% |
| 21 | Mining and Oil and Gas Extraction | 53,488 | 57,443 | 0.8% | 4.5% |
| 22 | Utilities | 28,883 | 34,058 | 1.8% | 4.4% |
| 23 | Construction | 57,775 | 76,514 | 3.2% | 4.1% |
| 31-33 | Manufacturing | 182,736 | 162,072 | -1.3% | 2.4% |
| Goods-Producing Industries (NAICS 11-33) |
346,174 | 365,036 | 0.6% | 3.6% | |
| Services-Producing Industries
(NAICS 41-91) |
722,590 | 906,458 | 2.6% | 2.2% | |
| Canadian Economy
(NAICS 11-91) |
1,068,765 | 1,266,578 | 1.9% | 2.6% | |
The activities of the goods producing sectors account for nearly one third of total value-added of all industries in the Canadian economy. Between 2002 and 2011, GDP growth for goods-producers increased 0.6% per year, which was below the average annual GDP incline in growth of 3.6% recorded for the Canadian economy.
Annual GDP Growth: 2010 and 2011
Goods-Producing Industries (NAICS 11-33)
*AFFH = Agriculture, Forestry, Fishing and Hunting (NAICS 11)
Source: Statistics Canada, Gross Domestic Product by Industry, 2002 to 2011.
In 2011, only the Manufacturing sector posted a negative CAGR of -1.3%. The Mining and Oil and Gas Extraction saw a decrease from 4.8% in 2010 to 4.5% in 2011.
GDP for the Manufacturing sector had been in decline since 2005. A decrease of 11.3% in 2009 was followed by an increase of 5.7% in 2010. In 2011, however, the goods-producing industries decreased anew to 2.4%.
Another goods-producing sector that saw its GDP increase again in 2011 was the Agriculture, Forestry, Fishing and Hunting sector. In 2010 and 2011 respectively, the sector saw a 0.3% increase in 2010 and currently, a 2.1% increase in 2011.
The Utilities sector recovered from its negative GDP rate of -0.2% in 2010 to 4.4% in 2011. It climbed over 4.0% in one year.
The Construction industry saw a decline from 6.6% in 2010 to 4.1% in 2011. However, the CAGR of the sector increased from 2.9% to 3.2%.
Important Notes on Gross Domestic Product Data
The GDP by Industry data in the present section are maintained by Statistics Canada's Canadian System of National Economic Accounts. The data are expressed in basic prices and presented in chained 2002 dollars. The process of chaining removes the effect of changes in price while minimizing distortion over time. In this section data are available for the years 2002-2011.
Readers should be aware that there are other ways of expressing Gross Domestic Product aside from those presented here (e.g. expenditure-based and income-based rather than by industry; at factor cost and market prices rather than at basic prices and in constant dollars as opposed to chained dollars). As a result, caution is recommended when comparing the data presented herein with other published sources.
The Gross Domestic Product (GDP) by Industry data within the present section does not define or examine recessionary periods for the Canadian economy, sectors, subsectors or industries. This type of analysis is possible through examining more precise quarterly and monthly trends. Monthly data are available from the Statistics Canada website (see Gross domestic product at basic prices by industry).
Understanding GDP and Value-Added
Gross Domestic Product (GDP) by Industry measures the value of output of an industry less the value of intermediate inputs required in the production process. In this sense, it is an output-based measure of economic activity and is commonly referred to as the total value-added of an industry.
The value-added concept is used to avoid double counting. For instance, GDP in the Retail Bakeries industry would not include the value of the flour used to make a loaf of bread, it would only include the value the Retail Bakeries industry adds by turning the flour into bread (for example, the mixing, leavening and baking process).
This example of value-added (GDP) can be broadened to illustrate the total value of a loaf of bread. Let us suppose we live in a simple world where the only two inputs needed to make bread are flour and water. And for the moment, let us assume water is free.
So as before, it is the baker who turns the flour into bread. This process is his value-added (GDP). For the baker, flour is an input into the production of bread, thus the value of the flour is not included in the value-added (GDP) of the baker.
The baker buys his flour from the miller, who produces flour by grinding wheat. So the value-added (GDP) of manufacturing flour is captured by the miller. Since the miller purchases wheat as an input, the value of wheat is not included in the value-added (GDP) of the miller.
Who does the miller buy his wheat from? From the farmer, who harvests the wheat from his land using his blood, sweat and tears. Then, the value-added (GDP) of wheat, which is ground to produce flour by the miller to make a loaf of bread by the baker, is captured by the farmer.
Since our baker owns a retail bakery, and sells his wares directly to market, the total value of the bread would equal the value-added of the farmer plus the value-added of the miller plus the value-added of the baker.
Understanding GDP and Economic Growth
Economic growth is often measured as the percentage increase in GDP, adjusted for inflation, from one year over an earlier year. Trend growth rates for an economy, sector or industry are calculated over a series of years. In Canadian Industry Statistics, the compound annual growth rate (CAGR) is frequently used to depict trends in real GDP growth and other economic indicators.
GDP growth is an important economic indicator. It measures progress or the rate of expansion of the economy's capacity to produce output (goods and services). It is examined as a measure of the short term stability or instability of the economy. GDP growth is also reflective of the future consumption possibilities for a nation and is the main source of improvements to our standard of living over time.
Economic growth occurs from accumulating human capital (knowledge and skills), investing in physical capital (factories, machinery and equipment) and the implementation of new technologies in the production process.
With benefits to economic growth come costs. One cost to economic growth is that in order to increase the consumption possibilities for tomorrow, we have to forego some consumption today. To maintain economic growth more effort has to be placed on the production of technology and capital in order to produce goods for future consumption, rather than the production of goods for current consumption.
Other costs may occur from sustaining a high rate of economic growth, such as resource and environmental degradation. However, the impact faster economic growth has on our environment and resources are not reflected in the measure GDP growth.
