The latest report on Canada’s natural resource sector revealed a mixed performance in the third quarter of 2024. The sector’s real gross domestic product (GDP) slightly decreased despite an uptick in job numbers and export volumes.
The natural resource sector’s real GDP saw a marginal decrease of 0.1% in Q3 2024, following a robust growth of 1.7% in the previous quarter. This dip comes amid a broader economic landscape where the overall GDP rose by 0.3%, an improvement over the 0.5% increase in Q2 2024.
Among the various subsectors, energy and hunting, fishing, and water industries saw modest gains. The energy sector grew by 0.3%, driven primarily by the production of refined petroleum products, which surged by 16.9%. However, this positive trend could not offset the declines in forestry (-2.4%) and mining (-0.6%).
Forestry’s decline was largely attributed to a significant downturn in sawmill and wood product manufacturing, which fell by 6.5%, although a slight recovery in pulp and paper products (+2.5%) helped alleviate some of the losses. Similarly, the minerals and mining subsector showed a mixed performance. While coal extraction and non-metallic mineral products manufacturing both experienced significant downturns, the increase in non-metallic mineral extraction (+1.0%) offered a glimmer of hope.
Despite the slight GDP contraction, exports from the natural resources sector grew by 1.1% in Q3 2024, bouncing back from a 3.1% decline in the previous quarter. The energy sector, buoyed by strong performance in refined petroleum products, played a crucial role in driving export growth. However, the forestry sector also contributed positively, increasing by 0.3%, while minerals and mining (-3.1%) and hunting, fishing, and water (-5.0%) saw declines.
On the import side, the sector saw a broader increase of 3.1%, with energy imports rising by 5.2%. This surge was driven by a 4.8% increase in crude oil imports and an 8.1% increase in refined petroleum products. Other subsectors, including forestry, minerals, and mining, also reported increased import volumes, indicating ongoing demand for natural resources, both domestically and internationally.
Natural resource prices, which had seen a 2.7% increase in the second quarter of 2024, reversed their trend in Q3, dropping by 2.3%. The most significant decline came in the energy sector, where prices fell by 3.6%, largely due to decreases in crude oil (-6.3%) and refined petroleum products (-5.5%). The forestry sector also experienced a 1.8% price drop, primarily driven by the fall in the sawmill and wood product prices. Meanwhile, the minerals and mining subsector slightly increased prices (+0.4%).
As a result of the decline in natural resource prices and the modest decrease in real GDP, the nominal GDP of the natural resources sector fell by 2.5% in Q3, reaching $340 billion. This represents 11.8% of the Canadian economy, a slight drop from the previous quarter. However, the job market in the sector showed resilience, with the number of jobs increasing by 0.3%, a modest rise attributed mainly to the energy (+1.0%) and minerals and mining (+0.1%) subsectors. The forestry and hunting, fishing, and water subsectors saw slight decreases in employment.
In the downstream activities of the forestry and minerals and mining subsectors, nominal GDP remained flat at $10.8 billion in Q3. While prices in these industries rose slightly by 0.2%, the overall performance of these secondary and tertiary sectors was stable, maintaining a steady position from the previous quarter.
The sector’s performance in the third quarter of 2024 highlights its challenges in a period of mixed results across various subsectors. Despite some positive signs in energy and exports, price fluctuations, particularly in crude oil and sawmill products, underscore the volatility inherent in the sector.