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May 29, 2020CANADA GDP BY INDUSTRY, MARCH 2020 Real GDP in Canada declined 7.2 per cent in March, the largest monthly decline since the series started in 1961. During the recession of 2008-2009, the largest monthly decline in real GDP was -1.4 per cent in December 2008. Compared to March 2019, the Canadian economy contracted 5.8 per cent with an annualized value of $1,847 billion (chained 2012 dollars) in March 2020.
In response to the COVID-19 pandemic, mandatory closures of non-essential businesses, schools and public institutions, travel restrictions and physical distancing, and the closure of Canada's international borders, affected all segments of the Canadian economy. Overall, 19 of 20 industrial sectors were down in March.
Goods-Producing Industries
Output for goods-producing sectors was down 4.6 per cent in March. Construction declined 4.4 per cent, led by decreases in residential construction (-3.8 per cent), repair (-7.6 per cent), and engineering and other construction (-3.2 per cent). Mining, quarrying, and oil and gas extraction decreased 5.0 per cent, largely due to a 26.9 per cent decline in support activities. The manufacturing sector was down 6.5 per cent in March, reflecting factory closures and reduced demand in the second half of the month.
Durable manufacturing dropped 11.1 per cent, led by declines in transportation equipment manufacturing. Closures of automotive plants in Canada and the US in response to the COVID-19 pandemic contributed to declines in motor vehicle manufacturing (-35.2 per cent) and motor vehicle parts manufacturing (-27.7 per cent).
Non-durable manufacturing decreased 1.1 per cent, with plastic and rubber products manufacturing (-9.2 per cent) and petroleum and coal product manufacturing (-7.9 per cent) contributing the most to the decline. Increases in food manufacturing (+3.1 per cent) and beverage and tobacco product manufacturing (+4.1 per cent) offset some of the decline in non-durable manufacturing.
Services-Producing Industries
Output for service producing sectors was down 8.1 per cent in March. Accommodation and food services sector output dropped by -36.9 per cent, with this sector significantly impacted by mandatory closures of all non-essential businesses. Arts, entertainment and recreation sector output fell 41.3 per cent, as restrictions on mass gatherings halted operations for sports leagues and other amusement, gambling and recreation businesses. Professional, scientific and technical services were down 8.6 per cent, on reduced hours worked across the sector.
Transportation and warehousing output dropped 12.2 per cent in March, as border closures and travel restrictions affected the sector. Air transportation was the largest contributor to the decline, as lower movement of goods and passengers forced Canada's major carriers to either suspend or significantly reduce operations by the end of March. Transit and ground passenger activity was also down for the month, led by declines in urban transit systems.
Retail trade declined 9.6 per cent in March, led by declines from motor vehicle and parts dealers (-38.6 per cent). Activity at food and beverage stores increased 15.2 per cent, likely due to panic-buying and self-isolation preparations by consumers.
Wholesale trade declined 5.1 per cent in March, with motor vehicle and part wholesaling activity down -20.4 per cent due to closures of automotive assembly plants. Building material and supplies merchant wholesaling output was down 7.3 per cent, as construction activity across Canada slowed.
Public sector (health, education and public administration) activity was down 9.4 per cent in March, reflecting in part a 13.5 per cent drop in educational services following the suspension of classes by all provincial governments. Public administration decreased 4.5 per cent, as all levels of government transitioned to work from home while some services, such as libraries and community centers, were closed.
Statistics Canada. Table 36-10-0434-01 Gross domestic product (GDP) at basic prices, by industry, monthly (x 1,000,000)
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