Canadian economy posted record drop in Q2 due to COVID-19, StatCan says
The decline is the steepest since quarterly data were first recorded in 1961, with almost every single component of the economy that works into calculating GDP at its lowest point over April, May, and June.
The Canadian economy posted its steepest decline on record in the second quarter of 2020 as the COVID-19 pandemic forced the closure of non-essential businesses and slowed the economy to a crawl, a new report from Statistics Canada said.
The agency says real gross domestic product contracted at an annualized rate of 38.7% for the three-month period, with almost every single component of the economy that works into calculating GDP was at its lowest point over April, May, and June – driven largely by lockdowns in April.
“Business investment fell 16.2%, reflecting limited construction activities, plant closures, low oil prices, and heightened uncertainty,” StatCan said. “Export volumes declined 18.4% and import volumes dropped 22.6%, as major trading partners’ economies shrank owing to their adoption of measures to contain the pandemic.”
Digging a little deeper into the business investment situation, the agency said that investments in machinery equipment fell 22.9%, led by declines in passenger cars (-93.8%), trucks, buses and motor vehicles (-89.4%), and aircraft and other transportation equipment (-43.4%). Business investments fell in engineering structures (-18.2%) and non-residential buildings (-11.8%).
Economic output rebounded in May by 4.8%, and StatCan reported an increase of 6.5% in June.
The agency’s preliminary estimate for July indicates a three-per-cent increase in real GDP.