Canada’s economy shrank at an 8.2 per cent annual pace in the first three months of 2020, as an already weak economy in January and February was walloped by COVID-19 in March.
Statistics Canada reported Friday that the slowdown was the sharpest quarterly drop since the financial crisis of 2009, as measures to contain the pandemic such as school and business closures, border shutdowns and travel restrictions brought economic activity grinding to a halt.
While bleak, the eight per cent decline was better than the ten per cent contraction that economists had been expecting for the period. For comparison purposes, the U.S. economy shrank by five per cent over the same time frame.
While the vast majority of the contraction came in March when the pandemic hit, January and February’s numbers weren’t overly strong to begin with due to pre-existing drags such as rail blockades across the country, and a teacher strike in Ontario in February.
In absolute terms, Canada’s gross domestic product was 2.1 per cent smaller over the three months than it was at the end of 2019. But much of that came in March alone, as GDP declined by 7.2 per cent during the month. That makes March 2020 the worst month for Canada’s economy since record-keeping began in 1961.
Just about everything got walloped, as 19 out of the 20 sectors the data agency monitors got smaller. The one exception was utilities, which eked out a gain of 0.4 per cent.
While March shattered the previous monthly record for slowdowns, early data suggests April’s numbers will be even worse, showing an 11 per cent contraction from March’s already depressed level.
By sector, the slowdown in March was striking, including:
Accommodation and food services, down 39.5 per cent.
Transportation and warehousing, down 12.2 per cent.
Air transportation, down 40.9 per cent.
Manufacturing, down 6.5 per cent.
Retail trade, down 9.6 per cent.
Educational services, down 13.5 per cent.
Arts, entertainment and recreation, down 41.3 per cent.
Construction, down 4.4 per cent.
Mining, quarrying, and oil and gas extraction, down five per cent.
Economist Doug Porter at Bank of Montreal found some reasons for optimism amid the gloomy numbers, noting that many parts of the economy did better than initially feared.
“The new news here is that the figures were a little less dire than feared,” he said. “Consumer spending fell only nine per cent in the quarter, while business investment was down a mild 2.7 per cent (less bad than Q4 in fact), and housing dipped just 0.4 per cent.”
Overall, Porter said the 8.2 per cent pace of contraction puts Canada right in the middle of its G7 peers. Canada’s economy did worse than Japan’s, which shrank at a 3.4 per cent pace, over the period. But Canada is faring much better than Italy and France, which saw their economies shrink at paces of 17.7 and 21.4 per cent in the same period.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
