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Canada’s natural resources real GDP fell 1.9% in Q4 2022

Canada’s real gross domestic product (GDP) of the natural resources sector fell 1.9 per cent in the fourth quarter of 2022, after rising 1.5 per cent in the third quarter. In contrast, the economy-wide real GDP was unchanged in the fourth quarter.

Compared with 2021, real GDP of the natural resources sector increased 2.5 per cent in 2022, while the economy-wide real GDP rose 3.4 per cent for the entire year. Annual real GDP of the energy subsector (+4.0 per cent) carried the natural resources sector, whereas forestry (-1.3 per cent) and minerals and mining (-0.9 per cent) both decreased.

Forestry sector

Real GDP of the forestry subsector decreased 1.8 per cent in the fourth quarter, mostly influenced by primary pulp and paper products (-2.8 per cent), reflecting upstream reductions in lumber extraction (-7.6 per cent).

Forestry prices decreased 3.6 per cent in the fourth quarter, led by primary sawmill and wood products (-9.4 per cent). Higher prices among services (+5.6 per cent) and primary pulp and paper products (+2.6 per cent) mitigated the overall decrease for the subsector.

Natural resource prices and employment

Falling prices amplified the decline in natural resources nominal GDP (-4.5 per cent) in the fourth quarter. The decline in natural resources activity was also reflected in a 2.3 percentage point decline in the industrial capacity utilization rate in the mining and oil and gas extraction industry as well as a 2.6 percentage point decline in the forestry and logging industry. Expressed as an annual rate, the nominal GDP of natural resources was $343.7 billion in the fourth quarter, representing 13.1 per cent of the Canadian economy.

Employment changes were muted (-1,650 jobs) for the sector in the fourth quarter, with gains in the energy subsector (+850) more than offset by losses in the forestry (-1,170) and minerals and mining (-1,300) subsectors.

From the fourth quarter of 2021 to the fourth quarter of 2022, employment in the natural resources sector rose 3.3 per cent (+20,000 jobs).