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

Just Posted

‘Each step is a prayer’: Ojibwe man will walk from Hope to Vancouver Island for Indigenous healing, reconciliation

James Taylor departs Sept. 20, returns to Saanich in five days for sacred fire

COLUMN: We don’t need an election. But it’s 2020, so we’ll probably get one anyways.

There are only selfish reasons for the NDP to trigger an election this fall

Tammy Wood earns top prize on Food Network’s ‘Wall of Chefs’

Former MasterChef contestant takes home $10,000 prize, beats out three other contenders

Say ‘Hi’ to the mountains (and rain): The smoke is gone from the Fraser Valley, for now

Saturday’s Fraser Valley air quality forecast at ‘moderate risk,’ but morning showers leave skies clear

Chilliwack Agriculture Tour goes virtual during pandemic

Rather than bus tourists to local farms, tour stops will be posted on Facebook and Instagram

3 new deaths due to COVID-19 in B.C., 139 new cases

B.C. confirms 40 ‘historic cases,’ as well

Ferry riders say lower fares are what’s most needed to improve service

Provincial government announces findings of public engagement process

Air quality advisory ends for the Lower Mainland

It had been in effect since Sept. 8

Supreme Court Justice Ruth Bader Ginsburg dies at 87

The court’s second female justice, died Friday at her home in Washington

Emaciated grizzly found dead on central B.C. coast as low salmon count sparks concern

Grizzly was found on Gwa’sala-‘Nakwaxda’xw territory in Smith Inlet, 60K north of Port Hardy

VIDEO: B.C. to launch mouth-rinse COVID-19 test for kids

Test involves swishing and gargling saline in mouth and no deep-nasal swab

Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Young Canadians have curtailed vaping during pandemic, survey finds

The survey funded by Heart & Stroke also found the decrease in vaping frequency is most notable in British Columbia and Ontario

B.C. teachers file Labour Relations Board application over COVID-19 classroom concerns

The application comes as B.C.’s second week of the new school year comes to a close

Most Read