Canada’s natural resource sector, a cornerstone of our nation’s economy, showcased its resilience in the fourth quarter of 2023 amidst a backdrop of global uncertainties. As the latest data unveils, the sector experienced a notable upswing in key indicators, signaling a promising turnaround after facing headwinds in preceding quarters.
The real gross domestic product (GDP) of Canada’s natural resources sector rebounded impressively by 1.4% in Q4 2023, following two consecutive quarters of contraction. This resurgence was primarily fueled by heightened activity in crude oil and metallic mineral extraction, with both sectors registering robust growth rates. However, it’s worth noting that despite this quarter’s growth, the overall trend for 2023 depicted a 1.7% decline in real GDP for the natural resources sector. This contrasts with the broader economy, which saw a modest 1.1% growth for the year and a marginal 0.2% uptick in Q4.
The performance of Canada’s natural resource exports and imports provides further insight into the sector’s health. In Q4 2023, export volumes surged by 3.1%, primarily driven by increased shipments of energy and mineral resources. Notably, crude oil and refined petroleum products spearheaded this export surge, compensating for declines in natural gas exports. Conversely, import volumes witnessed a 6.5% decline, mainly attributable to reduced imports of crude oil and metallic minerals. These dynamics reflect the sector’s resilience amid shifting global demand and supply patterns.
Despite the uptick in export volumes, natural resource prices experienced a downturn in Q4 2023, declining by 2.5% following a previous quarter’s gain of 4.3%. This decline, particularly pronounced in crude oil and refined petroleum products, underscores the influence of both domestic and international production factors. Notably, lower prices for crude oil and natural gas contributed to a 5.0% price decrease for natural resources in 2023, posing challenges for revenue generation within the sector.
The disparity between real GDP growth and price declines manifested in a 1.1% contraction in nominal GDP for Canada’s natural resources sector in Q4 2023. This divergence underscores the impact of falling prices on overall sectoral income, despite increased production levels. Expressed annually, natural resources’ nominal GDP stood at $336 billion in Q4, representing 12.2% of the Canadian economy—a figure indicative of the sector’s substantial contribution to national economic output.
On the employment front, the natural resources sector witnessed a modest uptick of 0.4% in job numbers during Q4 2023, primarily driven by growth in the forestry subsector. However, the overall picture for 2023 revealed a stagnant job market within the sector, with gains in energy and mineral extraction offset by declines in forestry. These employment trends reflect the sector’s evolving workforce dynamics amid technological advancements and shifting market demands.
Downstream activities, encompassing value-added processes downstream from resource extraction, recorded a marginal 0.2% increase in nominal GDP in Q4 2023. Despite this modest growth, downstream prices experienced a slight dip of 0.3%, following a previous quarter’s increase. However, the overall trend for 2023 depicted a positive trajectory, with nominal GDP of downstream activities increasing by 1.1% for the year—a testament to the sector’s resilience and adaptability.