May 2020 – Canada’s GDP goes up, but remains 15% lower than before the pandemic
The national economy grew by 4.5% in May, marking a significant increase after April’s low results. However, the number is still 15% lower than in February.
According to Statistics Canada, Canada’s GDP slightly exceeded $1.7 trillion, which is up from $1.62 trillion, seen in April, but down from $1.99 trillion reported before the COVID-19 pandemic.
This time, 17 of the 20 sectors of the economy reported gains, with goods-producing industries leading the way (an 8% hike). The service sector expanded by 3.4%.
Declines were seen in the sectors of management, public administration, and the arts and entertainment sector.
“The entertainment sector will remain under strong pressure, although the restart of the NHL in Canada should provide certain support,” – Bank of Montreal economist Benjamin Reitzes believes.
The largest increase was reported in the construction industry with its activity rising by 17.6%. In addition to it, retail was up by 16.4%. As a result, May showed the largest monthly growth for both those industries since record-keeping started back in 1961.
Meanwhile, economists predicted a 3.5% gain. According to the agency, preliminary data for June is even more optimistic with a possible monthly 5% increase.
At the same time, these results also show how long it will take to reach full recovery from COVID-19, as the output remains 15% below the pre-pandemic level.
TD Bank economist says “May GDP data provided us with another confirmation that the immediate economic influence of the pandemic is already behind us. An optimistic forecast for June, further reopenings and encouraging first data for July suggest the recovery from the first hit continues”.