Apr 30, 2020
Economic growth stalled in February ahead of virus downturn
February GDP data 'doesn't bode well overall for the first quarter'
Canada’s economy slid to a halt in February as the COVID-19 outbreak abroad dampened global growth.
Gross domestic product was unchanged from January, missing economist estimates for a 0.1 per cent gain, Statistics Canada reported Thursday. That follows a 0.2 per cent jump in the prior month.
Thursday’s numbers don’t provide much insight into the trajectory of the economy since conditions rapidly deteriorated in March when strict social distancing measures took effect. March GDP numbers to be released next month will likely offer greater insight into the extent of the virus on the economy.
- The report shows that the Canadian economy was slowing even before the pandemic really hit. Things will get much worse, with Statistics Canada already releasing a “flash” GDP report for March that showed a nine per cent decline during the month, and a 2.6 per cent for the first quarter as a whole.
- Rail blockades and labor strikes at schools disrupted economic activity in February with contractions in both the transportation and warehousing sectors and educational services industry
- Excluding the education and transportation sectors, the economy would have posted a 0.2 per cent gain with 13 of 20 sectors increasing
- Initial impacts of COVID-19 were noticeable in the air transport sector which was down 2.6 per cent in Feb.
- Accommodation and food services were also impacted by the outbreak, Statistics Canada said
- The real estate sector was a major contributor to growth, jumping 5.9 per cent in February
- On an annual basis, GDP rose 2.1 per cent
- In a separate release, the agency said the number of payroll employees declined 35,000 in February, led lower by losses in the wholesale trade sector. That’s already the fastest monthly decline since 2015.
- Wages were up 3.7 per cent from a year earlier.
--With assistance from Erik Hertzberg.