Canada’s real GDP fell by an historic 11.6% in April following a 7.5% drop in March, according to a recent report from Statistics Canada.
As many “non-essential” businesses resumed operations in May, the agency is expecting the economy to have rebounded by 3% that month. StatCan will release the final numbers for May at the end of July.
With many factories either reducing capacity or pausing operations altogether to curb the spread of the coronavirus, manufacturing dropped by 22.5% in April. The automotive sector was hit especially hard as vehicle production plummeted by a whopping 97.7%.
Food manufacturing – which actually saw a spike in March due to increased demand – plunged by 12.8%, due in large part to a spate of COVID-19 infections at meat processing plants.
Hospitality, retail, food services, bars, restaurants, sports, and entertainment all saw significant drops in April as well.
In a lone bright spot, e-commerce grew by 17.3%, buoyed by a substantial increase in online shopping.
Avery Shenfeld, chief economist for CIBC, said that April may mark the low point of the recession, as the economy bounced back somewhat in May and June.
Optimism is cautious at best, but economists are expecting improvement in the coming months.
“It’s very important to think about this in two halves: the first part of the year (was) a tremendously damaging economic scenario, and the second part of the year, obviously a very significant rebound as we reopen,” said Scotiabank chief economist Jean-François Perrault.