COVID-19 had an impact on the Canadian economy before the current crisis, according to new figures from Statistics Canada, which predicts that the current pandemic “will significantly affect economic activity in March and the following months.”
While the future release of economic data should come with the BC addendum (before COVID-19), the figures measuring economic growth in January already bear the imprint of the coronavirus.
Real domestic growth in Canada increased 0.1% in January, due to inclement weather in many parts of the country, including British Columbia, labor disruption in Ontario, and falling prices oil has dampened economic growth in parts of the country and in key sectors like energy.
The first effects of COVID-19 were already looming in the background. “In January, effects such as reduced trade with China and warnings against non-essential travel to China affected potential growth,” reads the accompanying new figures.
Transportation and warehousing, a trade-dependent industry, also fell in January, falling 1.7% for the second time in three months. “Air transport fell 2.7% as the movement of goods and passengers decreased,” said the report. “The winter storms in mid-January in many parts of the country caused several delays and cancellations at Canada’s busiest airports. The “rapid spread” of COVID-19, which resulted in travel advisories in late January, coupled with a computer problem with one of Canada’s largest air carriers, has also depressed trade.
Mining, quarrying and oil and gas extraction also declined in January 2020 before falling further in the face of a global supply war between Russia and Saudi Arabia, and falling demand for oil amid slowing economic growth and travel.
The spread of COVID-19 and responses from various governments (travel restrictions, banning various types of events and activities) have only intensified these trends, and Statistics Canada does not paint a pretty picture without citing precise figures.
“Due to these factors, as well as supply chain disruptions for many types of goods, temporary closings of stores and non-essential service providers and the recent decline in interest rates, the economic effects of the coronavirus epidemic will be felt deeply in the following months, “he said.
Statistics Canada implicitly recognizes that the January figures appear in a different context in light of current developments, but nevertheless sees some value in them.
“As the landscape of the Canadian and global economy has changed since January, the data at the start of the year is important for monitoring when and where changes occur in the months ahead,” said the report. “As such, this release and the detailed industry summary serve as a benchmark for the Canadian economy to measure the impact of the COVID-19 epidemic on various industries in the coming months.”
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