Statistics Canada says the economy saw its largest monthly drop on record in April as it came to a near standstill due to the pandemic, but early indications point to a rebound in May as businesses began to reopen. Statistics Canada’s offices at Tunny’s Pasture in Ottawa are shown on Friday, March 8, 2019. THE CANADIAN PRESS/Justin Tang

Statistics Canada says economy posted record 11.6% plunge in April

Statistics Canada said its initial flash estimate points to growth of three per cent in May

Statistics Canada says the economy saw its largest monthly drop on record in April as it came to a near standstill due to the pandemic, but early indications point to a rebound in May as businesses began to reopen.

The agency said Tuesday gross domestic product fell 11.6 per cent in April with non-essential businesses shut for the full month following a 7.5 per cent decline in March.

However, Statistics Canada said its initial flash estimate points to growth of three per cent in May. The estimate will be revised and finalized at the end of July.

Economists on average expect a drop of 13 per cent for April, according to financial markets data firm Refinitiv.

Manufacturing was down 22.5 per cent in April as many factories either shuttered 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 per cent.

Even sectors that had increases in March weren’t spared in April like food manufacturing, which dropped 12.8 per cent in April as outbreaks at meat processing plants forced them to shut down.

The accommodation and food services sector dropped 42.4 per cent in April, as customers replaced eating out with staying in, hitting a sector that saw a 37.1 per cent decline in March.

Output from bars and restaurants in particular plunged 40.8 per cent as local and provincial states of emergency forced their closure, or limited operations to take-out and delivery.

Accommodation services fell 45.7 per cent, Statistics Canada says, owing to restrictions on travel between provincial and international borders.

And then there was sports.

As COVID-19 iced the National Hockey League season and put the National Basketball Association, Major League Baseball and Major League Soccer on the sidelines, the arts and entertainment sector declined 25.6 per cent, further affecting companies in the accommodation and food services sectors.

Down too was construction by 22.9 per cent, concentrated largely in Ontario and Quebec, while a similar decline was noted in retail trade as brick-and-mortar stores stayed closed and consumers spent less while staying at home.

Poring through the data, Statistics Canada noted a jump in output of 17.3 per cent from online shopping as households shifted their shopping habits.

The silver lining in the horrible April numbers may be that it marked the bottom of this short but extremely deep recession, CIBC chief economist Avery Shenfeld said.

In a note, he wrote that the flash estimate for May is roughly half of what was expected, but the rebound may be more robust in June with more economic reopenings taking place.

“But thereafter, repairing the rest of the March and April wreckage will be a slower process, as recent COVID-19 flare ups here and elsewhere are showing the hazards of moving too far ahead of the virus,” he wrote.

“Markets were expecting the April news, and we can’t tell if the flash estimate for May will be treated as a disappointment.”

READ MORE: COVID-19 to leave some lasting economic damage, Bank of Canada chief says

The Canadian Press


Like us on Facebook and follow us on Twitter.

Want to support local journalism during the pandemic? Make a donation here.

Canadaeconomy

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Comments are closed

Just Posted

Horrifying video shows near head-on collision by Golden

The video was captured on dash cam along Highway 1

Morning Start: Dogs can smell cancer

Your morning start for Tuesday, July 7, 2020

Save-On-Foods donates to Golden Food Bank

The funds were a part of the Pay It Forward campaign.

Collision results in train derailment just east of Golden

The derailment occured Sunday night, according to a statement from CP.

QUIZ: A celebration of dogs

These are the dog days of summer. How much do you know about dogs?

84-year-old Okanagan resident finishes 12,000-piece puzzle

Willie Tribiger started the puzzle in 2013, completing it in six and a half years

Aces aplenty at Okanagan golf course

Vernon Golf and Country Club has 14 recorded holes-in-one since April 30

Fraser Valley woman complains of violent RCMP takedown during wellness check

Mounties respond that she was not co-operating during Mental Health Act apprehension

B.C. sees 12 new COVID-19 cases, no new deaths

Three outbreaks exist in health-care settings

Lost dog swims Columbia River multiple times searching for home

The dog was missing from his Castlegar home for three days.

Booze on beach extended through summer in Penticton

Pilot project will stay in place until Oct. 15

Sad ending in case of missing Okanagan senior

Body of Vernon man Wayne Orser found floating in Okanagan Lake Tuesday, July 7

COVID-19: B.C. promotes video-activated services card

Mobile app allows easier video identity verification

ICBC to resume road tests in July with priority for rebookings, health-care workers

Tests have been on hold for four months due to COVID-19

Most Read