Real gross domestic product declined 0.7% in January, Statistics Canada reported Tuesday.

January’s drop followed decreases of 1% in December and 0.7% in November of 2008.

The January decline was in line with economists expectations.

The output of manufacturing, especially of motor vehicle and associated parts industries, as well as wholesale trade and construction were the main contributors to the January drop, StatsCan said.

Activity in the manufacturing sector decreased for a sixth consecutive month in January, down, 3.1%. While 18 of the 21 major manufacturing groups lost ground, about half of the decline was attributable to a 27% reduction in motor vehicle and associated parts production.

The volume of wholesaling activity continued to fall in January, down 3.4%, while Construction activity was down 3%.

The finance and insurance sector, transportation, mining (excluding oil and gas extraction), and accommodation and food services also retreated.

The finance and insurance sector retreated 0.7% in January in light of the reduced level of activity in banking services, stock brokerages and mutual fund sales.

In particular, banking activities related to residential mortgages and short-term business loans declined. However, activities in short-term personal loans and fixed-term deposits recorded a modest increase, StatsCan said.

Economic activity increased in retail trade, oil and gas extraction and the public sector.

Value added in retail trade increased 1.4% in January, following three consecutive monthly declines.

IE