VANCOUVER (NEWS 1130) – Canada’s economic activity slowed in February compared to the first month of the year, and early estimates show overall growth, while consistent, is expected to cool of slightly in the first three months.
The gross domestic product (GDP) grew 0.4 per cent in February, down from 0.7 per cent in January, according to Statistics Canada.
However, it marks 10 consecutive months of growth as Canada recovers from the record drops in March and April 2020 due to the COVID-19 pandemic. The economy was growing at an annual rate of 6.5 per cent in the first quarter. The gains were aided by a rebound in activity as public health restrictions eased.
Statistics Canada estimates growth of 0.9 per cent for March. The preliminary estimate for the first three months of the year compares with growth at an annualized rate of 9.6 per cent over the last three months of 2020.
Related articles
- Canada’s GDP down 5.4 per cent in 2020, worst year on record
- Canada’s economy grew 0.7 per cent in January
- Canada’s GDP sees massive growth in Q3
There’s still a long way to go though, because the overall year-over-year comparable still shows an economy lagging by about two per cent compared to this time a year ago. Taking into account the preliminary numbers for March, Statistics Canada estimates the economy last month was roughly one per cent below pre-pandemic levels.
February’s overall economic activity was about 2 per cent below the same month in 2020.
Service industries that have been hard-hit through the course of the COVID-19 pandemic showed a small gain in February, while goods-producing industries had a small contraction for the first time since last April.
Third wave to set Canada back
The bad news is the third wave of the virus should reverse much of the recent progress, according to CIBC senior economist Royce Mendes. But he sees a silver lining in the data.
“The fact that the economy was able to pick up steam so quickly after the end of the second wave suggest that the Canadian economy will be able to rebound, hopefully, at a pretty fast pace once we can get the virus back under control,” he said.
February showed a division between goods-producing and service sectors, as retail jumped after two months of decreases as public health restrictions eased in much of the country, offset by declines in mining and gas extraction for first time in six months.
Manufacturing, too, pulled back 0.9 per cent in February after posting a 1.5 per cent increase one month earlier in January.
Retail trade jumped 4.5 per cent after two months of decreases.
Clothing, sporting goods, hobby, book and music stores saw double-digit increases in activity, alongside furniture and home furnishing stores as part of a trend of spending on household goods as Canadians continued to stay home.
Similarly, construction was up in February, as were sales from store selling building materials and garden equipment.
Accommodation and food services grew 3.5 per cent in February after five months of declines as restaurants and bars benefitted from an easing of restrictions.
With files from The Canadian Press