Statistics Canada says that Canada’s gross domestic product (GDP) fell 11.6% in April with non-essential businesses shut for the full month.
The April plunge followed a 7.5% GDP decline in March. And, while a record decline, April’s GDP figure was better than expected. Economists, on average, expected a drop of 13% for April, according to financial markets data firm Refinitiv. Even though the April figures fell short of expectations, they showed the unprecedented drop the country experienced in such a short time.
Early indications point to a rebound in May when businesses began to reopen. Statistics Canada said its initial flash estimate points to growth of 3% in May, mirroring a small increase in jobs numbers during the same month. The estimate will be revised and finalized at the end of July. And, preliminary indicators suggest June may be even better.
The Conference Board of Canada reported Monday that its consumer confidence index improved across all regions this month. The Canadian Federation of Independent Business said Tuesday nearly three-fifths of small businesses are fully open, almost one-quarter are making normal sales, and just over one-third are back to normal staffing levels.
In terms of economic sectors, manufacturing was down 22.5% in April as many factories either shutdown or greatly reduced capacity in line with public health measures to slow the spread of COVID-19 -- a move that hit the automotive sector hard as the output of motor vehicles plunged 97.7%. Even sectors with March increases weren't spared in April. Food manufacturing, for example, dropped 12.8% as outbreaks at meat processing plants forced them to shut down.
Output from bars and restaurants fell 40.8% as local and provincial states of emergency forced their closure, or limited operations to take-out and delivery. Accommodation services fell 45.7%, Statistics Canada said, owing to restrictions on travel between provincial and international borders.
