Canada’s economy shrank at the fastest pace on record in the second quarter, as consumer spending, business investment, imports and exports all dried up because of COVID-19.
Statistics Canada reported Friday that the country’s gross domestic product shrank by 11.5 per cent in the three-month period between April and June. That’s a 38.7 per cent pace of contraction for the year as a whole, far and away the steepest and fastest decline on records that date back to 1961.
At 11.5 per cent, the quarterly contraction was better than the 12 per cent that Statistics Canada had been forecasting, but still more than twice as bad as the lowest point hit in the financial crisis of 2009, when the worst three-month period for GDP came in at -4.7 per cent.
The numbers show in stark relief just how pronounced the slowdown caused by the sudden shock of COVID-19 was. But they also seem to suggest that a corner has been turned, and a rebound back up may be equally swift.
While the second quarter was the worst quarter for Canada’s GDP in almost 60 years, the numbers for June specifically make that month the biggest bounceback on record, too.
June’s GDP grew by 6.5 per cent from May’s level as provinces reopened their economies and consumers and businesses started spending again. But the economy has yet to fully bounce back to where it was. Even after June’s strong numbers, Canada’s GDP is still 9 per cent below where it was in February.
Retail sales have fully recovered, but key industries like manufacturing, construction and the energy sector have yet to get back to their pre-pandemic levels of output, the numbers released Friday show.
Preliminary data for July suggests the economy grew by another three per cent that month from June’s level, which is why economists are hopeful that the recovery that is underway will be enough to get the economy fully up and over the hole it fell into during the first wave of COVID-19.
“Because the weakness was entirely front-loaded — the economy was essentially shut in April — there are already plenty of signs that growth will snap back with purpose in Q3,” Bank of Montreal economist Doug Porter said of the numbers.
Brian DePratto at TD Bank was cautiously optimistic about the forecast. “As significant as the damage was, it was largely contained to March and April,” he said. “We may be through the worst of it, but it is still a long road to normal.”
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.
