Experimental indexes of economic activity in the provinces and territories, November 2020
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Released: 2021-03-15
In November, economic activity decreased or decelerated in most provinces and territories. This finding is reflected in both the principal component analysis (PCA)-based and the least absolute shrinkage and selection operator (LASSO)-based economic activity indexes.
The PCA- and LASSO-based experimental indexes were developed to address the need for a comprehensive measure of economic activity at the sub-national level in advance of the annual estimates of gross domestic product for the provinces and territories. PCA and LASSO are statistical methods that can be used to combine a range of economic indicators from a number of areas (e.g., the labour market, merchandise trade, manufacturing production, and wholesale and retail trade) into composite indicators.
On a month-to-month basis, the PCA indexes show decreases in economic activity for 6 of the 11 provinces and territories reported. Among the remaining 5 provinces and territories, 2 recorded a slowdown in growth. The LASSO-based indexes show declines in economic activity in 3 of the 12 provinces and territories surveyed and a slowdown in growth in 8 of the 12 provinces and territories.
Growth trend slows
The three-month moving averages of growth for the PCA- and LASSO-based indexes show a slowing of economic activity over the late fall as COVID-19 cases increased across the country. The three-month moving average of the activity index growth rates declined as the majority of monthly growth rates from the PCA-based indexes and LASSO-based indexes either became negative or had slower growth rates than in October.
The PCA-based indexes show a decline in the three-month moving average of monthly growth rates from October to November in 7 of the 11 indexes reported. The largest declines were seen in Alberta, British Columbia, and Ontario. The LASSO-based indexes show declines in 9 of the 12 indexes reported, with the largest declines in Alberta, British Columbia and Quebec.
Note to readers
Additional information is available in the paper titled "Experimental Economic Activity Indexes for Canadian Provinces and Territories: Experimental Measures Based on Combinations of Monthly Time Series," which is part of the series Analytical Studies: Methods and References (11-633-X).
Contact information
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To enquire about the concepts, methods or data quality of this release, please contact Ryan Macdonald (343-998-1890; ryan.macdonald@canada.ca), Economic Analysis Division.
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