Canada’s real gross domestic product or GDP witnessed a historic contraction in April, dropping by nearly 12 per cent, due to restrictions imposed to counter the Covid-19 pandemic. But, there are already signs of revival as phased reopening has a positive effect on the economy.
Statistics Canada or StatCan stated that real GDP dropped 11.6 per cent in April after a decline of 7.5 per cent in March. April was the first full month during which restrictive measures were in place and the data reflects its impact on the economy. As StatCan noted, “All 20 industrial sectors of the Canadian economy were down, producing the largest monthly decline since the series started in 1961.”
Overall, the economy was 18.2 per cent below where it was in February this year, prior to the coronavirus crisis.
Earlier, StatCan had estimated a decline of about 11 per cent for April and this final figure is in line with its forecast. At that time, it had also noted that “March and April decreases are likely to be the largest consecutive monthly declines on record.”
While the economic low at the peak of the crisis was predictable, the number did fall short of the approximately 13 per cent others had indicated. However, a turnaround may be in the offing as StatCan said that preliminary information indicated a rise of about 3 per cent for May. “Output across several industrial sectors—including manufacturing, retail and wholesale as well as the public sector (health, education and public administration)—increased in May, as activities gradually resumed in phases depending on the type of activity and the geographic area,” it said. The data for June could be even better since several provinces accelerated phased reopening during that month.
{{/usCountry}}While the economic low at the peak of the crisis was predictable, the number did fall short of the approximately 13 per cent others had indicated. However, a turnaround may be in the offing as StatCan said that preliminary information indicated a rise of about 3 per cent for May. “Output across several industrial sectors—including manufacturing, retail and wholesale as well as the public sector (health, education and public administration)—increased in May, as activities gradually resumed in phases depending on the type of activity and the geographic area,” it said. The data for June could be even better since several provinces accelerated phased reopening during that month.
{{/usCountry}}Among the sectors hardest hit in April was manufacturing which fell by 22.5 per cent.
StatCan has been providing an “advanced aggregate indicator of the state of the Canadian economy” due to the unprecedented situation precipitated by the Covid-19 pandemic.