Canada’s economy continued its recovery in July from the first wave of COVID-19, with the country’s gross domestic product expanding by three per cent.
Statistics Canada reported Wednesday that all 20 sectors of the economy grew as businesses continued to reopen and tried to get back to some sense of normal after lockdowns in March and April.
Output in agriculture, utilities, finance and insurance businesses, as well as real estate rental and leasing companies, clawed back to where it was before the pandemic struck. Retail trade businesses accomplished the same feat the month before, in June. But despite July’s growth, all other types of businesses still have yet to get back to their previous highs.
The biggest expansions in the month were in hotels/restaurants (up 20.1) and arts/entertainment/recreation (up 14 per cent), but those figures come off a very low base and are still facing the deepest slump versus year-ago levels, Bank of Montreal economist Benjamin Reitzes said of the numbers.
All in all, GDP was six per cent below February’s level, Statistics Canada said.
The three per cent gain was in line with what economists had been expecting. It was about half as much as the 6.5 per cent increase seen in June.
While StatsCan is still calculating the final numbers, its early projection for August shows an expansion of just one per cent, which suggests that Canada’s economic recovery is running out of steam as it appears a second wave of the virus is hitting some parts of the country.
TD Bank economist Sri Thanabalasingam said based on the July numbers, those fears are well founded.
“Slowing and uneven growth are indications that the Canadian economy is transitioning from the rebound phase to a more challenging stage of the recovery,” he said.
“Even without restrictions, consumers and businesses may rein in spending activity in response to rising caseloads. The second wave is now upon us, and the course of the recovery will depend on our success in containing it.”