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Transportation and warehousing fall behind pace of Canadian economy

OTTAWA, Ont. -- The economy surged ahead in January, expanding 0.4% after two months of sluggish growth, but Statis...


OTTAWA, Ont. — The economy surged ahead in January, expanding 0.4% after two months of sluggish growth, but Statistics Canada says transportation and warehousing were not able to keep pace.

Transportation and warehousing showed only 0.2% growth for the month. Truck and rail transportation were hampered by the weather in what turned out to be the coldest January in nearly a decade with also heavy snowfall .

Both the rail and the truck transportation industries posted lower output levels in January.

“Firms in the rail industry reported that the frigid weather caused their trains to run slower, forcing them to use fewer train cars but more locomotives. Winter storms also caused disruption to schedules for both the rail and trucking industries,” Statistics Canada notes.

A more positive sign for the transportation and warehousing industries is that the January figures do show a 3.8% gain over the same period the previous year. In contrast the economy overall grew by 3.4% this January compared to January 2002.

The 0.4% gain in GDP for the Canadian economy was the sixteenth consecutive monthly increase.

Industrial production (mining, utilities and manufacturing sectors) increased by a substantial 0.9%, after declining in the previous two months. All three components reported significant jumps in output. Comparable US statistics on industrial production showed a 0.8% increase; however, in the United States, higher manufacturing and utilities output was offset somewhat by lower output in their mining sector.

Motor vehicle manufacturers ramped up production levels 6.2%, after a four-month retrenchment when manufacturers cut back production to cope with ballooning inventories. Nevertheless, although most plants hiked output in January, some continued to curb production for further inventory control. Production levels in January remained 13.3% below the peak reached in August 2002. North American motor vehicle sales dropped sharply in January, following huge gains in December.

Motor vehicle parts manufacturers boosted output a further 2.8%, fuelled by increased North American motor vehicle production. Exports of motor vehicle parts jumped 7.1% in January. Wholesalers of motor vehicles and parts enjoyed a spectacular month as the impact of higher motor vehicle and parts production, as well as a recent surge in imports of motor vehicles and parts, made its way through the system. Wholesalers of automotive products were the largest contributor to the strength in the wholesaling industry in January.


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