Canada’s economy shrank by nine per cent in March, according to a flash estimate published by Statistics Canada on Wednesday.
The decline, StatsCan said, is the most severe since the series first began in 1961. March, as a result would drag down growth for the entire first quarter to -2.6 per cent.
The government agency normally only releases GDP figures two months after the last reference date. Data for January, for example, was only released in March. Given the rapid economic downturn, however, StatsCan felt it was necessary to release an estimate that it warns isn’t of the “same quality” and will change when the full numbers are released in May.
The sectors that have struggled most in the economic shutdown are travel and tourism along with any related industries that fall within that wider umbrella such as restaurants, accommodation and personal transportation. Other notable declines were seen in retail, entertainment and sporting events. StatsCan did not publish numbers detailing the damage.
StatsCan said some sectors were still able to grow throughout the downturn, pointing to food distribution, health, online retailing and streaming. The oil and gas sector may have been struggling with historically low crude prices and plunging stocks, but StatsCan said both extraction and transportation remained stable during the month and did not appear to be substantially impacted.
Historic declines aside, March may only represent the tip of the iceberg. The Conference Board of Canada’s provincial economic outlook suggests the economy will contract 25 per cent over the second quarter. This decline, a record should it come to pass, would set Canada on pace for a 4.3 per cent GDP decline in 2020.
“Physical distancing requirements as well as the closure of non-essential businesses have brought a large portion of the economy to a standstill,” said Alicia Macdonald, associate director, economic forecasting, at The Conference Board of Canada wrote in a report published Wednesday. ““As a result, every province has fallen into recession.”
Because it’s dealing with social distancing measures and the collapse of oil prices, Alberta’s economy would be the worst performer of the provinces and contract by 5.8 per cent, the report said. Saskatchewan would also be subject to a five per cent decline in GDP because of weakness in the mining industry. The report forecasts that each of the other provinces will see GDP fall between 3.0 and 3.9 per cent.