Canadian GDP Dropped 8% in First Quarter in Wake of COVID
Canada’s economy declined the most since the 2008-09 financial crisis in the first three months of the year, as large sections of the economy were shut down and businesses across the country were forced to close their doors and lay off workers to fight the coronavirus outbreak, Statistics Canada said Friday.
Statistics Canada said GDP fell an annualized rate of 8.2% in the first three months of 2020, and the downturn – which was the sharpest since the first quarter of 2009 – reflects measures imposed in March to contain the pandemic, such as school and non-essential business closures, border shutdowns, and travel restrictions, as well as events earlier in the quarter, mainly the Ontario teachers’ strike and rail blockades in February.
The collapse came as GDP for March fell 7.2% as restrictions by public health officials began rolling out during the month, including school closures, border shutdowns, and travel restrictions.
Friday’s report revealed household spending was down 2.3% in the first quarter of 2020, the steepest quarterly drop ever recorded.
“Spending reductions were influenced by substantial job losses, income uncertainty, and limited opportunities to spend because of the mandatory closure of non-essential retail stores, restaurants and services, and restrictions on travel and tourism activities,” Statscan said.
Governments’ final consumption expenditure was down, falling 1%, the largest decline since the first quarter of 2013, reflecting school closures and curtailed government administration.
Exports also fell 3%, and imports declined by 2.8%, as major trading partners – notably, the United States, China, and most European countries – implemented similar public health measures.
According to Statistics Canada, just about every industry was impacted in March, with 19 out of the 20 sectors the data agency monitors seeing drops, contributing significantly to the large monthly decline. The one exception was utilities, which had a gain of 0.4%.
Here’s a look at the slowdown in March by sector:
- Accommodation and food services, down 39.5%
- Transportation and warehousing, down 12.2%
- Air transportation, down 40.9%
- Manufacturing, down 6.5%
- Retail trade, down 9.6%
- Educational services, down 13.5%
- Arts, entertainment and recreation, down 41.3%
- Construction, down 4.4%
- Mining, quarrying, and oil and gas extraction, down 5%