Statistics Canada says the economy saw its biggest month-to-month drop on record in April as it concerned a near grinding halt due to the pandemic, however early indications indicate a rebound in May as businesses started to resume.
The firm said Tuesday gross domestic product fell 11.6 percent in April with non-essential companies shut for the full month following a 7.5 percent decrease in March.
Statistics Canada said its initial flash estimate points to growth of 3 per cent in May. The price quote will be revised and finalized at the end of July.
Economists usually anticipate a drop of 13 percent for April, according to financial markets data firm Refinitiv.
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Production was down 22.5 per cent in April as many factories either shuttered or greatly decreased capacity in line with public health procedures to slow the spread of COVID-19– a relocation that hit the automobile sector hard as the output of automobile plunged 97.7 percent.
Even sectors that had increases in March weren’t spared in April like food production, which dropped 12.8 per cent in April as break outs at meat processing plants forced them to shut down.
The accommodation and food services sector dropped 42.4 percent in April, as customers replaced eating in restaurants with staying in, hitting a sector that saw a 37.1 percent decline in March.
Output from bars and restaurants in specific plunged 40.8 percent as local and provincial states of emergency forced their closure, or minimal operations to take-out and shipment.
Lodging services fell 45.7 per cent, Data Canada states, owing to limitations on travel between provincial and global borders.
And after that there was sports.
As COVID-19 iced the National Hockey League season and put the National Basketball Association, Big League Baseball and Big League Soccer on the sidelines, the arts and home entertainment sector declined 25.6 per cent, additional impacting business in the accommodation and food services sectors.
Down too was building by 22.9 percent, focused mostly in Ontario and Quebec, while a comparable decrease was kept in mind in retail trade as brick-and-mortar shops remained closed and consumers spent less while staying at house.
Poring through the data, Data Canada kept in mind a jump in output of 17.3 percent from online shopping as households moved their shopping practices.
The silver lining in the awful April numbers might be that it marked the bottom of this brief but extremely deep recession, CIBC chief financial expert Avery Shenfeld stated.
In a note, he composed that the flash quote for May is approximately half of what was anticipated, but the rebound might be more robust in June with more economic reopenings happening.
” However afterwards, fixing the rest of the March and April wreckage will be a slower process, as current COVID-19 flare ups here and somewhere else are showing the dangers of moving too far ahead of the virus,” he wrote.
” Markets were anticipating the April news, and we can’t inform if the flash price quote for May will be dealt with as a dissatisfaction.”
This report by The Canadian Press was very first published June 30, 2020.