Canada's natural resource sector sees flat Q4 GDP, export volumes rise

Investing.com -- The latest report from Statistics Canada reveals that the real gross domestic product (GDP) for the natural resources sector in Canada showed no growth in the fourth quarter of 2024. This stagnation follows a similar trend from the third quarter of the same year. In contrast, the country's economy-wide real GDP saw a slight increase of 0.6% in the fourth quarter, after a 0.5% rise in the third quarter.

Several subsectors of natural resources experienced a decline in real GDP in the fourth quarter, including forestry (-1.3%), hunting, fishing and water (-1.2%), and minerals and mining (-0.1%). These declines were somewhat offset by a 0.2% gain in the energy subsector, fueled by a 1.4% increase in crude oil extraction.

Despite the lack of growth in real GDP, the fourth quarter saw a 5.0% increase in natural resource export volumes, following a 1.0% rise in the third quarter. This growth is attributed primarily to the energy (+5.7%), forestry (+4.9%), and minerals and mining (+3.7%) subsectors. However, the hunting, fishing, and water subsector saw a decrease of 3.6%. Notably, refined petroleum products in the energy subsector showed a substantial gain of 17.9% in the fourth quarter, marking two consecutive quarters of strong growth.

Import volumes in the natural resources sector increased by a modest 0.5% in the fourth quarter, following a 2.2% increase in the third quarter. This growth was driven by increases in the minerals and mining (+3.5%) and forestry (+1.9%) subsectors, which offset a decline in the energy subsector (-2.9%).

The fourth quarter also saw a 0.7% increase in natural resource prices, a reversal from the 2.9% decrease in the previous quarter. Prices increased in the minerals and mining (+5.5%), forestry (+4.2%), and hunting, fishing, and water (+0.2%) subsectors, reversing the trend from the prior quarter. The energy subsector, however, continued its downward trend with a 1.3% price decrease.

Higher prices in the fourth quarter resulted in a 0.7% increase in the nominal GDP of the natural resources sector. Expressed at an annual rate, the nominal GDP of natural resources increased to $344 billion in the fourth quarter, making up 11.7% of the Canadian economy.

The number of jobs in the natural resources sector decreased slightly (-0.3%) in the fourth quarter. An increase in the energy subsector (+0.6%) was offset by decreases in the hunting, fishing and water (-1.8%), forestry (-1.2%), and minerals and mining (-0.3%) subsectors.

Secondary and tertiary processing for the forestry and minerals and mining subsectors, identified as downstream activities, saw a nominal GDP of $9.6 billion in the fourth quarter, reflecting a decline of 1.3% from the previous quarter.

In 2023, the real GDP of the natural resources sector decreased by 0.2% overall, with most provinces and territories experiencing a decline. Exceptions were Alberta (+1.7%), Saskatchewan (+2.2%), New Brunswick (+4.0%), Nunavut (+3.1%), and Prince Edward Island (+1.7%).

That same year, the natural resources sector added 17,000 jobs, with the energy (+16,400), hunting, fishing and water (+3,800) and mineral and mining (+1,400) subsectors leading the way. The forestry sector saw a decrease of 4,600 jobs in the same year. The largest increases in jobs in the natural resources sector were observed in Alberta (+8,700) and Quebec (+3,700).