OTTAWA – Industry Canada reports the ICT sector in the first quarter reported its sixth consecutive quarterly increase with a growth of 0.5%, but the rate of growth has slowed compared to the five previous quarters. In comparison real GDP for all Canadian industries grew by 1.1%.
While the ICT sector (information, communications, technology) continues to trend upwards following the mid-2009 recession, with a cumulative growth of 5.8% since the third quarter of 2009, weak export numbers have stalled job growth reports Industry Canada.
Communications equipment industry real GDP experienced a slight decrease compared to a significant increase in the previous quarter. Meanwhile, output for the instruments industry decreased sharply this quarter, continuing its steady downward trend since the second quarter of 2009.
In the first quarter of 2011, ICT manufacturing GDP increased slightly, up 0.2% from the previous quarter. In comparison total Canadian manufacturing GDP increased by 2.5% breaking the stagnation experienced in the last three quarters. “While both ICT manufacturing GDP and Canadian manufacturing GDP trended downwards from mid-2008 until mid-2009, ICT manufacturing GDP levels did not fall as severely as Canadian manufacturing GDP,” states Industry Canada.
Industry Canada states that total Canadian manufacturing output has not been as resilient as ICT manufacturing output. ICT manufacturing output returned to its pre-downturn level quickly, while Canadian manufacturing GDP only recovered this quarter. In the current quarter, ICT services continued to increase, up 0.6%, for a sixth consecutive quarter. Total Canadian services also grew, up 0.7% over the previous quarter. Both ICT services and total Canadian services continue to trend upwards at a steady pace reports Industry Canada.
Real GDP increased in two of the four key ICT manufacturing industries this quarter. The electronic components and computer and peripheral equipment industries increased by 5.4% and 3.3%, respectively. Electronic components output trended upwards, for the third consecutive quarter, surpassing its pre-downturn level. Real GDP for the computer and peripheral equipment industry continued to grow for the sixth consecutive quarter. The instruments and communications equipment industry output decreased by 4.6% and 0.2%.
For the first quarter of 2011, output in ICT services was pulled down by ICT wholesaling. Real GDP in ICT wholesaling dropped this quarter by 1.1%, breaking seven consecutive quarterly increases. Excluding wholesaling, ICT services output increased by 0.7%, while it increased by 0.6% including wholesaling.
Industry Canada attributes the slower increase in ICT services this quarter to small increases in software and data processing services, which increased by 0.3% and 0.1%, respectively, while computer systems design and telecommunication services both increased by 0.9%.
ICT manufacturing shipments fell by 1.9% this quarter, after four quarters of increases. ICT manufacturing shipments experienced a sharp decline between the third quarter of 2008 and the second quarter of 2009. Shipments continued to steadily decrease up until the beginning of 2010, when they reached their lowest level since 2002. Since the first quarter of 2010, ICT manufacturing shipments steadily increased, only dropping this quarter. ICT manufacturing shipments have yet to return to the level prior to the decline says Industry Canada.
The decline in ICT manufacturing shipments this quarter was largely due to decreases in shipments of communications equipment, down 11.6%, and shipments of instruments, down 3.3%. Industry Canada notes the decrease in communications equipment shipments this quarter nearly offsets the large increase of the previous quarter. Shipments of instruments have trended downwards steadily since the end of 2008, and this period marks the second consecutive decrease. After experiencing decreases in the previous quarter, shipments of computer and peripheral equipment and electronic components increased by 4.1% and 2.6%, respectively.
In the first quarter of 2011, ICT goods exports declined 6.2%, the second consecutive quarterly decrease. ICT exports dropped throughout 2009, leaving ICT goods exports at the lowest level of the analyzed period. The declining trend flattened off at the end of 2009 and turned around in the second quarter of 2010, but has been falling again in the last two quarters. Total Canadian exports have trended upwards since the second quarter of 2009, up 4.1% this quarter.
All four key ICT product group exports decreased this quarter. Exports of communications equipment saw the sharpest decline, down 14.6%. Exports of instruments fell 5.2% after increasing in the previous three quarters. Computer equipment exports fell 4.3%, while electronic components exports experienced a decrease of 3.6%. Exports of communications equipment, computer equipment, and electronic components all decreased for a second quarter in a row.
Employment in the ICT sector decreased slightly in the first quarter of 2011, down 0.1% form the fourth quarter of 2010 breaking five consecutive quarters of increases. Meanwhile, employment in the Canadian economy continued to grow moderately for the sixth consecutive quarter, with a growth of 0.2% in the first quarter of 2011.
