Slow and steady is the name of the game for Canada’s economic recovery.
According to a Wednesday report by Statistics Canada, the national gross domestic product grew by 3% in July. This significant number is in response to the nation’s recovery efforts after the economy was put in a standstill due to the ongoing COVID-19 global pandemic.
Where Was the Growth? The good news is that all 20 sectors of the economy demonstrated growth, delivering optimism to investors and consumers that the country would recover from the lockdowns that took place in March and April. The biggest winners were in the fields of finance and insurance businesses, real estate rental and leasing companies, agriculture, and utilities. These sectors have rebounded to where they were prior to the onset of the pandemic.
Retail trade businesses had already recovered to previous levels in June. The rest of the industry sectors are still fighting to get back to their previous highs, despite the steady progress.
The hotel and restaurant sector saw the biggest gains, finishing the month up 20.1%. The category of arts, entertainment, and recreation also finished strong with a gain of 14%. While the numbers look promising, it is important to remember that these figures are coming off record lows.
Although it is easy to be hopeful about these significant gains, the numbers are still a far cry from where they were just one year ago. The total GDP is still 6% less than where it was in February.
Moving Forward: The overall 3% boost fits into the parameters that economists had predicted. This gain was approximately half that of the 6.5% gain in June. This slowdown was to be expected because June was when the country was finally able to open. Moving forward, Statistics Canada is predicting that the August expansion numbers will fall around 1%. This prediction indicates that the recovery has already hit peak levels and will continue to slow.
Second Wave of Virus Impacting Continued Recovery: What is worrisome for many economists is the prediction by health experts that a second wave of the virus will take hold in parts of the country as the winter season arrives. Some areas of Canada have already seen a sharp uptick in cases, calling into question how the economy will be able to sustain this growth. Now that the big rebound has already happened, economists will be looking to sustained growth to fuel the recovery without the threat of a backslide.
