Value-added exports, 2007 to 2011

Released: 2015-07-30

Production for exports a key driver in the Canadian economy

Production related to exports accounted for 22% of gross value added or gross domestic product (GDP) and 2.9 million jobs in 2011. Despite increasing in 2010 and 2011, the contribution of exports to total GDP remained below its pre-recession high of 25% in 2008. Following three years of declines, the number and overall share of jobs related to the export sector increased in 2011.

The growing global fragmentation of production and international sourcing of inputs into production make it difficult to understand the contribution of a country's gross exports to its GDP. To fill this analytical gap, Statistics Canada is publishing a new value-added exports database. The database measures the contribution of exports to gross value added or GDP by removing the value of the imported intermediate inputs (non-capital purchases from other industries) embodied in exported products. This method provides a measure of the contribution of exports to the GDP of each industry and of the total economy.

The impact on value-added include both the direct impact on exporting industries and the indirect impact on industries supplying the exporters. The contribution of each industry's exports to total GDP is calculated as the sum of the direct and indirect impact on all other industries. Alternatively, the reliance of each industry on foreign demand is measured as the sum of the direct and indirect impact from exports by other industries. Finally, in a parallel fashion, the direct and indirect impact of exports on jobs (whether generated via the exports of an industry or attributable to the industry's overall foreign demand exposure) are also available. The figures are compiled from the annual input-output tables and cover the period from 2007 to 2011.

Exports to the United States were the largest contributors to change

Exports to the United States drove changes in the contribution of exports to GDP. At 15% in 2011, they had regained less than one-quarter of the 3.9 percentage point decline in 2009. In turn, the contribution of exports to all other countries, at 7.0% of Canadian GDP in 2011, had already exceeded its pre-recession high in 2008 by 0.2 percentage points.

Chart 1 
Contribution of exports to gross domestic product, 2007 to 2011

Manufacturing and mining exports were the largest contributors

In 2011, production for export in the mining and oil and gas extraction sector showed the highest direct contribution to GDP at $71 billion. This was followed closely by manufacturing at $69 billion, while services accounted for $68 billion. When the total contribution to value-added through the purchase of goods and services from domestic suppliers is considered, the contribution of manufacturing exports to the Canadian economy more than doubles to $154 billion.

Other sectors have relatively smaller ripple effects. The services sector showed an indirect impact of an additional 53% of the direct impact for a total of $103 billion, while the extraction sector accounted for an additional 34% for a total impact of $95 billion.

A comparison of 2007 to 2011 data show that manufacturing was the main cause of the decline in the contribution of exports to total GDP when considering the sum of the direct and indirect impact on other industries. By the end of this five-year period, manufacturing exports contributed 2.6 less percentage points to GDP when combining the direct (-1.3 percentage points) and indirect (-1.3 percentage points) impact on other industries. Services edged down 0.5 percentage points, led mostly by the trade, hotels, and restaurants sector. Meanwhile, mining and oil and gas extraction, despite declining during the recession, ended the period with a 0.6 percentage point increase in the total impact on GDP.

Goods producers have the highest exposure to foreign demand

The goods-producing industries have shown a high reliance on world markets when measured as the sum of the direct impact and the impact from other exporting industries. In 2011, 30% of the GDP of these industries was directly dependent on exports. This dependence increased to 44% when the impact from other industries, through inter-industry sales to other Canadian exporters, was added. A closer examination of industrial detail shows that the share of foreign demand in the mining sector's total value-added stood at 71% in 2011. Agriculture, forestry and fishing accounted for 55% and manufacturing 52%. These shares compare with 17% for business sector services, which, on average, were relatively less exposed to world markets.

Among all industries, agriculture, forestry and fishing showed the highest indirect reliance on exports, with almost half of its exposure to foreign demand due to sales to exporting manufacturers.

Goods exporters rely on services

While the services industries are mostly oriented toward the domestic market, they are, nonetheless, important contributors to the exports of the goods-producing industries. In the manufacturing sector, for example, 25% of the value-added in exports originates in the services industries. This reliance on the services sector is generalized across manufacturing industries and ranges from 21% in 'other transportation equipment' to 31% in 'wood and paper.'

Exports contributed relatively less to jobs than to gross domestic product

In 2011, exports contributed 2.9 million jobs, representing 17% of the overall employment. This marked the first annual increase in the number and overall share of jobs related to the export sector following three years of declines.

The relatively lower contribution of exports to jobs compared with GDP is, to a large extent, driven by the mining industry, which generates a very high level of value-added per job, at seven times the economy-wide average. US demand accounts for approximately two-thirds of exports-related jobs, in line with its share of exports (69%).

Chart 2 
Contribution of exports to jobs, 2007 to 2011

Jobs directly dependent on exports were almost equally split between services (787,000) and goods (753,000) producers in 2011. Manufacturing accounted for 612,000 jobs (40%) and mining for 61,000 jobs (4%). This contrasts substantially with the total contribution of these industries to GDP, where mining (33%) was much higher than its jobs figure. Manufacturing (32%) and services (31%) each accounted for approximately one-third of the direct contribution of exports to GDP.

Purchases by exporters from other domestic producers accounted for another 1.4 million jobs. Over half of these additional jobs were in manufacturing, with services and mining and oil and gas extraction accounting for much of the remainder.

The biggest decline in jobs related to exports between 2007 and 2011 was in the manufacturing sector. Of the 239,000 manufacturing jobs lost during the five-year period, 90% (214,000) were linked to the export sector. Of these, 166,000 were directly related to manufacturing exports, with an additional 48,000 related to exports in other sectors. Manufacturing exports, through their indirect impact on other industries, required 189,000 fewer jobs from other domestic suppliers.

Most of the remaining declines in export-related jobs over the five-year span were in trade, hotels and restaurants, which had 62,000 fewer direct export jobs and required 25,000 fewer indirect jobs. The largest increase over the five-year period was in mining and oil and gas extraction, where the number of direct jobs increased by 7,000 and the number of indirect jobs rose by 47,000.

Contact information

For more information, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca).

To enquire about the concepts, methods or data quality of this release, contact Andreas Trau (613-951-3466; andreas.trau@statcan.gc.ca).