April 15, 2009

Shrinking construction industry helps push Canada further into recession

The construction industry in Canada had its largest monthly contraction on record, which helped push the country’s economy further into the recession.

The Canadian economy continued to shrink in January, as manufacturing activity dropped.

The overall economy declined at a rate not seen for more than 15 years.

Statistics Canada released a report late last month that said real gross domestic product (GDP) declined 0.7 per cent in January, which follows decreases of one per cent in December 2008 and 0.7 per cent in November 2008. Compared with January 2008, the construction industry declined by 4.8 per cent.

“Construction activity was down three per cent in January,” said the report.

“Residential and non-residential building construction, as well as engineering and repair work decreased. There was a sharp decline in residential building construction (6.4 per cent), particularly in the construction of new dwellings. Commercial and industrial building construction also contracted, while that of institutional buildings edged up.”

The main contributors to the January drop were the output of manufacturing, especially of motor vehicle and associated parts industries, as well as wholesale trade and construction.

The monthly contractions for wholesale trade was (3.4 per cent) and manufacturing (3.1 per cent).

JOC News Service

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