Canadian Economic Dashboard and COVID‑19

Weekly update - Friday, May 7, 2021

Employment fell by 207,000 in April as lockdown measures tightened in several regions of the country. Losses in April reflected declines in both full-time and part-time work. Lower employment in Ontario accounted for nearly three quarters of the headline decrease, while one half of headline losses reflected lower employment among 15- to 24-year-olds.

Employment levels in several high-contact service industries in recent months have moved in parallel with changes in the intensity of public health measures. Employment in accommodation and food services fell 59,000 in April, largely as a result of losses in Ontario and British Columbia, where bans on indoor dining were re-introduced in late March and early April. The number of people working in retail trade fell by 84,000, as stricter restrictions on the operations of non-essential stores were implemented in Ontario, Alberta and several regions of Quebec.

With April's headline decrease, net employment losses since the onset of the pandemic rose to 503,000, more than half of which reflect losses among young workers. Employment among young women in April was 164,000 below pre-pandemic levels, while employment among young men was 99,000 below levels reported in February 2020. More than two-thirds of net employment losses since the onset of the pandemic were in accommodation and food services.

Canada's unemployment rate increased to 8.1% in April. Among 15- to 24-year-olds, the unemployment rate rose to 16.1%. The youth unemployment rate stood at 10.4% prior to the onset of the pandemic.

The labour underutilization rate—which reflects the number of people who are either unemployed, who want a job but did not look for one, or who are employed but worked less than half of their usual hours—rose 2.3 percentage points to 17.0% in April.

The number of Canadians working from home grew by 100,000 in April to 5.1 million. The number of Canadians adapting to COVID-19 by working from home remains above 3 million.

On May 4th, the agency released March's merchandise trade report. Trade activity strengthened to end the quarter, led by a sizable, broad-based increase in imports. At $102.4 billion, total merchandise trade in March was at its highest level since May 2019, marking the first time since the onset of the pandemic that both monthly exports and imports were above pre-COVID levels.

Following back-to-back surpluses, Canada's merchandise trade balance returned to a deficit position in March (-$1.1 billion). Over one half of the change in the trade balance reflected a smaller surplus in energy products.

Headline exports edged up 0.3%, led by higher shipments of motor vehicles and parts and metal ores. Production slowdowns in the auto sector had less of an impact in March, while exports of iron ores rebounded after declining sharply in February. Non-energy exports rose to $41.2 billion, the third highest level on record.

While lower exports of energy products moderated the headline increase, total merchandise exports, at $50.6 billion, were 5.9% above pre-COVID levels.

Headline imports rose 5.5% in February, led by higher shipments of energy products and motor vehicles and parts. Higher imports of consumer products also supported the headline increase. Total merchandise imports, at $51.8 billion, were 2.9% above pre-COVID levels.

Following three consecutive declines, imports of medical and protective goods, measured on a customs basis, rose 22.6% to $3.2 billion in March, led by higher imports of medical equipment and products and diagnostic products. Imports of "vaccines for human medicine other than for influenza," the category that includes the COVID‑19 vaccines, rose 77.1% to a record $189 million in March. Further increases are anticipated in the months ahead.

March data on trade in services were also released on May 4th. Canada's total international trade in services edged higher in March, supported by higher receipts and payments for commercial services. Despite the gain, total trade in services remained one-quarter below pre-COVID levels. Most of the decline since the onset of the pandemic reflects lower receipts and payments for travel services.

Building permits data for March were also released on May 4th. Permits in March posted their third consecutive monthly record, reflecting a booming residential sector. Residential permits rose 15.9%, exceeding the $8 billion mark for the first time. Permits for single family homes increased 7.6% to $3.8 billion, while permits for multi-family dwellings reached an unprecedented $4.3 billion. Total residential permits in March were 47% above pre-COVID levels.

The latest edition of Canadian Economic News providing a concise summary of selected Canadian economic events, and international and financial market developments, is now available.

Upcoming releases: The leading indicator of cross-border traveller volume for April will be released on May 11th. Investment in building construction for March will be released on May 12th. March's manufacturing report will be released on May 14th.

Data

The data used to create this interactive web application is from the following listed data tables:

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Additional information

Notes

This dashboard presents selected data that are relevant for monitoring the impacts of COVID‑19 on economic activity in Canada. It includes data on a range of monthly indicators – real GDP, consumer prices, employment, merchandise exports and imports, retail sales, hours worked and manufacturing sales - as well as monthly data on aircraft movements, railway carloadings, and travel between Canada and other countries.

Estimates are presented from January 2019 to the current reference month for each data series. The information will be updated continuously as new data becomes available, and additional series may be added to the dashboard as circumstances warrant.

Previous weekly updates

Weekly update - Friday, April 30, 2021

Economic activity continued to strengthen in February, albeit at a more moderate pace. Bolstered by higher output in retail trade and construction, real GDP rose 0.4%, after advancing 0.7% to start the year. February's headline gain marked the tenth consecutive monthly increase in economy-wide output since the historic declines recorded in March and April 2020. Total economic activity in February remained 2.2% below pre-COVID levels.

Following two consecutive monthly declines, retail trade rose 4.5% as lockdown measures eased in several regions of the country. Stores more dependent on in-store traffic experienced the largest rebound in activity. Total retail activity in February was 2.2% above pre-pandemic levels.

Construction activity continued to advance, buoyed by a strong increase in residential output. With gains in nine of the last ten months, residential construction in February was 15.3% above pre-COVID levels.

Accommodation and food services rose 3.5%, following five consecutive monthly declines. Output in this sector in February was about 40% below its pre-COVID level.

Lower output in mining and oil and gas extraction tempered February's headline gain. Output in the oil sands fell 4.8% after five months of steady growth. Manufacturing output also declined in February as the global semi-conductor shortage affected production levels in the auto sector.

Statistics Canada also released an advance estimate of real GDP for March, with preliminary information pointing to a 0.9% increase. This advance estimate points to an approximate 1.6% increase in real GDP in the first quarter of 2021.

There was a modest rebound in payroll employment in February as containment measures eased in several regions of the country. The number of employees receiving pay or benefits from their employer rose by 43,400, after declining by nearly 136,000 to start the year. February's headline increase reflected gains in Quebec, Alberta and British Columbia.

Following three consecutive months of substantial losses, payroll employment in accommodation and food services rose by 14,700. Retail payrolls rose by 13,300, after declining sharply in January.

February's increase in payroll employment was smaller than the headline increase reported from the Labour Force Survey, in part because of lags in new or returning employees receiving their first paycheques. Total payroll employment in February was 6.8% below pre-COVID levels, with net losses since the start of the pandemic remaining over 1.1 million.

February's retail report was released on April 28th. Retail sales rebounded sharply in February (+4.8%), after lockdown measures in central Canada had weighed on retail spending in December and January. Over three quarters of February's headline increase reflected higher sales in Quebec.

Sales at food services and drinking places rose 6.7% to $4.4 billion in February, supported by higher sales at full-service restaurants and drinking places as several provinces eased COVID‑19-related restrictions. Ontario, Alberta, and Quebec posted the largest increases in dollar terms. However, on a seasonally unadjusted basis, total sales in February were still down 34.2% from pre-pandemic levels.

Civil aviation statistics for February were released on April 28th. The situation remained bleak for the Canadian airline industry, which carried 482,000 passengers in February, down 93.1% from last year and 39.5% from January 2021. February saw the suspension of flights to Mexico and the Caribbean as well as testing on arrival with a hotel stopover for passengers arriving from abroad. Operating revenue earned by airlines totaled $267.9 million in February, down 85.5% from the same month last year.

While the pandemic continues to curtail the movement of people, the agency reported on April 26th that Canadian railways carried 27.2 million tonnes of freight in February, up 1.0% from a year earlier, marking the fourth consecutive year-over-year increase. Domestic intermodal loadings – mainly containers – accounted for most of the increase in the volume of cargo in February, surging 42.0% from February 2020 on the heels of a 20.2% year-over-year gain in January. It appears that the replenishment of inventories and higher imports of some consumer goods in February helped to create stronger demand for multimodal containerized transport to dispatch larger and quicker shipments in the wake of COVID.

Weekly update - Friday, April 23, 2021

Headline consumer inflation returned to pre-pandemic levels in March as the downwards pressure from the base year coupled with current price growth led to a sharp acceleration in the headline rate. Consumer prices rose 2.2% on a year-over-year basis in March, the largest increase since February 2020.

Higher gasoline prices, bolstered by a rising global demand for oil and production cuts in OPEC+ countries, were the main contributor to the acceleration in headline rate. Gas prices, measured year-over-year, were 35.3% higher in March, the largest increase in twenty years. Excluding gasoline, consumer inflation stood at 1.2%, up from 1.0% in February.

Shelter prices rose sharply in March, supported by higher building costs and the surging demand for single family homes. Measured year-over-year, shelter prices rose above the two percent mark (+2.4%) for the first time since the start of the pandemic. The homeowners' replacement cost index, which partly reflects changes in new home prices, rose for the thirteenth consecutive month and was 7.9% higher than in March of last year. At the same time, mortgage interest costs fell for the eleventh consecutive month, and were down 6.3% from levels observed in March 2020.

Food price inflation held steady at 1.8% in March and has been below the two percent mark since November of last year. Prices for clothing and footwear were 5.4% lower than in March 2020.

On April 22nd, the agency reported on travel between Canada and other countries for February. While an advisory against travel outside Canada and a mandatory 14-day quarantine period for those returning were still in effect, additional restrictions were imposed as of February 22nd. Non-residents and returning Canadians arriving by air were required to take a COVID‑19 test on arrival and remain in a government-authorized hotel while awaiting the results. Arrivals to Canada from other countries in February were down 93.6% year-over-year. Similarly, the number of Canadians returning from abroad was down 93.1% over the same period. Just under 111,800 Canadians flew home during the month, down by over half (-52.1%) from January.

Upcoming releases: On April 26th, the agency releases data on railway carloadings for February and, on April 29th, aircraft movement statistics for the same month.

Weekly update - Friday, April 16, 2021

After advancing swiftly to start the year, factory sales fell 1.6% to $55.4 billion in February as the global shortage of semiconductors continued to impact production levels in the auto sector. Sales at auto assembly plants fell 14.5% to $3.3 billion, their lowest level since May 2020. Sales at assembly plants have declined in five of the last seven months and, in February, were 31% below pre-COVID levels. The tight supply of semiconductors also negatively impacted sales of plastics and rubber products manufacturers as many plastic products are used as intermediate inputs in auto production.

February's headline decrease was moderated by higher sales of petroleum and coal products, chemicals, and wood products. Sales of petroleum and coal products rose for the fifth consecutive month, rebounding to within 15% of pre-pandemic levels as prices continued to strengthen. Sales of wood products, supported by higher prices and volumes, rose for the ninth time in ten months and were nearly 70% above pre-pandemic levels.

After rising above pre-COVID levels to start the year, total factory sales in February were 0.8% below levels reported in February 2020.

February's wholesale report was released on April 16th. Wholesale sales edged down 0.7% after advancing by 4.0% to start the year. February's headline decrease reflected lower sales of building materials and supplies and motor vehicles and parts. Despite the decrease, sales in February were the second highest on record.

The decline in building materials and supplies (-6.1%) followed the double-digit increase in January. Sales in this subsector, buoyed by strong momentum in housing markets, have advanced in eight of the last ten months, and remained almost 20% above pre-COVID levels. Sales of motor vehicles and parts fell for the third time in four months as the semiconductor shortage negatively impacted supply chains in the auto sector. Wholesale sales of motor vehicles and parts in February were almost 10% below pre-pandemic levels.

On April 12th, Statistics Canada updated the adjusted price index that can be used to evaluate how monthly changes in consumer expenditure patterns since the onset of the pandemic have affected the overall pace of consumer price inflation. Estimates from this adjusted index are now available up to February 2021. The year over-year change in the adjusted index in February was 1.5%, while headline consumer inflation stood at 1.1%. The gap between the two measures has remained at 0.4 percentage points since September 2020.

On April 13th, the agency released Experimental estimates of economic activity in the provinces and territories for the December 2020 reference month. These estimates pointed to a slowdown in the pace of the recovery in many regions of the country as containment measures tightened in late 2020. Slowdowns in economic activity were observed in Saskatchewan, Alberta, Quebec, Ontario and New Brunswick.

The agency also released the 2020 international trade report on April 14th, which provided detailed contextual analysis of how the extraordinary events of last year impacted Canadian trade activity. The report is available at the following link: The Daily — Canadian international trade in 2020: A year without precedent

Weekly update - Friday, April 9, 2021

Employment rose by 303,000 in March as public health restrictions continued to ease in many regions of the country. March's headline increase reflected gains in industries that were most impacted by lockdown measures early in the year. Employment in retail trade rose by 95,000, as gains over the last two months fully offset the large decline in January. Employment in information, culture and recreation services rose by 62,000, the first increase since September. Employment in accommodation and food services rose by 21,000, after advancing by 65,000 in February.

With March's headline increase, net employment losses since the onset of the pandemic declined to 296,000, more than half of which reflect losses among 15 to 24 year-olds. Employment among young women in March was 122,000 below pre-pandemic levels, while employment among young men is 39,000 below levels reported in February 2020.

Canada's unemployment rate in March fell to 7.5%, the lowest level since February 2020. Among 15 to 24 year-olds, the unemployment rate declined to 14.0%. The youth unemployment rate stood at 10.4% prior to the onset of the pandemic.

The labour underutilization rate—which reflects the number of people who are either unemployed, who want a job but did not look for one, or who are employed but worked less than half of their usual hours—fell 1.9 percentage points to 14.7% in March, the lowest level since February 2020.

On April 7th, the agency released February's merchandise trade report. Trade activity moderated in February after an export-led surge to begin the year. At $98.7 billion, total merchandise trade remained above pre-COVID levels for the second consecutive month, supported by stronger exports levels. Total merchandise exports in February were 4.1% above pre-COVID levels, while imports were 2.8% below levels reported in February of last year.

The merchandise trade balance remained in surplus for the second consecutive month, marking the first back-to-back monthly surpluses since late 2016.

Headline exports were down 2.7% in February after advancing by over 8% to start the year. Lower exports of metals, motor vehicles and parts, and aircrafts contributed to the moderation in export levels. Exports of passenger cars and light trucks fell by 11.5% as many assembly plants were forced to slow production because of the global shortage in semiconductor chips. Exports of auto and auto parts have declined in five of the last seven months and were almost 19% below pre-COVID levels in February.

Higher exports of energy products, buoyed by higher prices for natural gas due to extreme weather conditions in the southern United States, partially offset lower shipments of metals, motor vehicles and parts, and aircraft. Energy exports have increased for five consecutive months.

Headline imports fell 2.4% in February, the third decline in the last four months as imports fell to their lowest level since August of last year. Lower imports of motor vehicles and parts and energy products contributed to the headline decrease.

Imports of medical and protective goods, measured on a customs basis, were down 1.6% to $2.6 billion in February, the third consecutive monthly decrease. Imports of personal protective equipment were lower, as imports of other protective equipment and face and eye protection continued to gradually return to levels seen before the COVID‑19 pandemic. Imports of gloves have declined each month since reaching a peak in November, but remained well above pre-pandemic levels.

February data on trade in services were also released on April 7th. Canada's total international trade in services declined in February, and remained over one-quarter below pre-COVID levels. Most of the decline since the onset of the pandemic reflects lower receipts and payments for travel services.

February's report on building construction, released on April 9th, underscored the ongoing momentum in Canada's housing market. Investment in residential construction has been at record levels since September 2020, reaching a new high of $12.3 billion in February. The majority of this growth stemmed from single-family home construction, which rose for the fifth consecutive month to $6.7 billion in February.

The latest edition of Canadian Economic News providing a concise summary of selected Canadian economic events, and international and financial market developments, is now available.

Weekly update - Thursday, April 1, 2021

Economic activity strengthened in early 2021 despite the lockdowns impacting high-contact services in different regions of the country. After edging up 0.1% at year end, real GDP rose 0.7% in January, supported by increases in wholesaling, manufacturing, and resource extraction. January's headline gain marked the ninth consecutive monthly increase in economy-wide output since the historic declines recorded in March and April 2020. Total economic activity in January remained about 3% below pre-COVID levels.

Wholesaling activity strengthened markedly to start the year, rebounding from the pull-back in December. January's increase reflected broad-based gains, and was led by increases in machinery and equipment wholesaling, and building material and supplies wholesaling. Manufacturing output also rose to start the year, supported by increases in fabricated metals, machinery, and wood products. Mining and oil and gas extraction advanced for the fifth consecutive month as oil sands production continued to strengthen.

Accommodation and food services fell 3.0% in January, following the 6.7% decline at year end. January's decline marked the fifth consecutive monthly decrease, as output in accommodation and food services fell to 58% of its pre-COVID level. Retail trade was down 1.7% to start the year following the 3.6% decline in December. Retail activity in January was about 3% below levels observed before the onset of the pandemic.

Statistics Canada also released an advance estimate of real GDP for February, with preliminary information pointing to a 0.5% increase.

January's payroll employment report, released on March 30th, underscored the continued impact of the lockdowns on high-contact services. The number of employees receiving pay or benefits from their employer fell by 134,500 in January, reflecting sharp losses in retail trade, accommodation and food services, and arts, entertainment and recreation. Cumulative employment losses in accommodation and food services from October to January totaled nearly 128,000.

Hourly paid workers continue to be among those hardest hit by the lockdown measures. Employment among hourly paid workers fell sharply in January, marking the third consecutive monthly decrease. The number of hourly-paid workers receiving pay or benefits from their employer was 10% below pre-COVID levels. Total payroll employment in January was 7.0% below pre-COVID levels, with net losses since February 2020 remaining over 1.1 million.

On March 30th, the agency released January data on aircraft movements. In January, one year after the first Canadian airline routes were suspended due to COVID‑19, total aircraft movements were down 29.8%. Compared with January 2020, itinerant movements declined by 41.8% while local movements increased by 3.4%.

With Canada's largest carriers announcing further service reductions during the first quarter of 2021, year-over-year declines in transborder and international movements continued into January (-78.6% and -73.2% respectively).

Boundary Bay, British Columbia was Canada's most active airport in January with 13,164 movements.

Weekly update - Friday, March 26, 2021

Sales at food services and drinking places fell for the fourth consecutive month in January, reflecting sharp declines in Ontario and Quebec as restaurants and customers continued to adjust to tighter containment measures.  Headline sales were down 2.8% to $4.1 billion, the lowest monthly level since May 2020. About 60% of the headline decrease reflected lower sales at full-service restaurants, with receipts at these establishments in January amounting to less than one half of pre-COVID levels. Overall sales at food services and drinking places were 37% below levels reported prior to the start of the pandemic.

On March 22nd, Statistics Canada reported that the volume of cargo carried by Canadian railways in January reached 32.6 million tonnes, up 7.7% from levels in January 2020. January's increase marked the third straight month of year-over-year growth. Loadings of coal surged by 35.5% from levels in January 2020, while loadings of iron ore and concentrates were 13.0% higher, appearing to signal a rebound in steel production. The agency reported last week that January sales in the primary metals industry increased for the fourth consecutive month. Railcar loadings of many agricultural and food products remained strong; wheat loadings rose 28.6% year-over-year in January, following similar increases in November and December 2020. Energy products continued to decline year-over-year, with loadings of fuel oils and crude petroleum down 45.1% in January, after similar drops in November and December 2020.

Counts of travel between Canada and other countries in January were released on March 23rd. With another wave of the virus washing over many parts of the world, additional restrictions on international arrivals by air were announced by the federal government in January and existing restrictions on non-essential travel across the Canada-US border were extended into February. In January, arrivals of non-residents from the United States and other countries were down 92.3% compared with January 2020. Similarly, the number of Canadian residents returning from abroad was down 90.4% over the same period. While the number of Canadians flying home from abroad in January was down 89.9% from a year earlier, over 233,200 Canadians flew home during the month, up by over one-third from December.

Weekly update - Friday, March 19, 2021

Headline consumer inflation edged up to 1.1% in February, led by higher prices for gasoline.  Gasoline prices rose over 6% from January to February, as stronger global demand pushed year-over-year prices into positive territory for the first time since the start of the pandemic. Headline consumer inflation has averaged 0.5% since COVID‑19 began impacting the Canadian economy in March 2020, largely reflecting the impact of lower gas prices on the headline rate. Excluding gasoline, consumer inflation has averaged 1.1% since the start of the pandemic.

February's inflation report continued to highlight the ongoing divergence between mortgage borrowing costs and new housing costs. Measured month-over-month, mortgage interest costs fell for the tenth consecutive month as lower interest rates continued to put downward pressure on borrowing costs. At the same time, the homeowners' replacement cost index rose for the twelfth consecutive month as strong demand for single-family homes and higher construction costs continue to put upward pressure on new home prices. According to February's new housing price index, released on March 18th, new home prices rose at their fastest monthly pace in more than three decades (+1.9%), as high demand and limited supply continue to fuel price increases in many areas of the country.

On March 19th, the agency released January's retail report. Following a sharp decline at year end, retail sales fell 1.1% in January as lockdown measures weighed on activity in Quebec and Ontario. Lower sales at clothing and clothing accessories stores and at furniture and home furnishing stores contributed to the headline decrease.

Sales in Quebec fell 9.8% as retailers faced new restrictions on non-essential businesses and on the sale of non-essential goods. The curfew also reduced operating hours for some essential retailers.

Sales in Ontario declined 2.6% after contracting sharply at year end. January's decrease reflected lower sales at clothing and clothing accessories stores.

Retail e-commerce sales, measured on an unadjusted basis, were $3.5 billion in January, accounting for 7.8% of total retail trade. Based on respondent feedback, approximately 14% of retailers were closed at some point in January, on average, for three business days.

Total retail sales in January remained 0.5% above pre-COVID levels. The agency also released an advance estimate of retail sales for February 2021, which points to an increase of 4.0%.

The agency released January's manufacturing report on March 15th. Factory sales rose 3.1% to start the year, surpassing February 2020 levels for the first time since the start of the pandemic. Higher sales of wood products, computers and electronic products, and primary metals supported the headline increase.

Sales of wood products, buoyed by rising lumber prices, rose for the eighth time in nine months. Bolstered by strong housing markets in the Canada and United States, sales in January were 62% above pre-pandemic levels.

Sales of computer and electronic products rose by over 22%, advancing for the fifth time in the last six months. January's increase reflected higher sales of navigational, measuring, medical and control instruments. Sales of primary metals rose for the fourth consecutive month, supported by higher prices and volumes.

January's headline increase was tempered by lower sales of motor vehicles and parts, as a global shortage of semi-conductor chips affected production levels across the auto sector. Sales at auto assembly plants were down 8.2%, falling to their lowest level since May 2020.

Weekly update - Friday, March 12, 2021

Employment rose by 259,000 in February as public health measures eased in many regions of the country. February's gain, concentrated in industries that were heavily impacted by the recent lockdown measures, offset headline losses in December and January. Employment in retail trade rose by 122,000, while employment in accommodation and food services increased by 65,000. Overall gains were concentrated in Quebec and Ontario.

About one-half of February's headline increase reflected higher employment among core-age workers, while almost 40% reflected gains among younger Canadians, who were heavily impacted by the recent lockdown measures.

Canada's unemployment rate in February fell to 8.2%, the lowest level since March 2020. Among 15 to 24 year-olds, the unemployment rate declined to 17.1%.

The labour underutilization rate—which reflects the number of people who are either unemployed, who want a job but did not look for one, or who are employed but worked less than half of their usual hours—fell 1.8 percentage points to 16.6%, the lowest level since February 2020.

January's report on building construction, released on March 8th, underscores the pandemic's continuing impact on Canada's housing market. Investment in single-unit dwellings advanced for the eighth time in the last nine months, and was 19% above pre-pandemic levels to start the year. While higher outlays in Ontario have led the growth in single-unit construction, single-unit investment in Nova Scotia and Quebec both reached record highs in January. Total residential outlays, which include combined spending on singles and multi-unit buildings, rose to $11.6 billion in January,13% above levels reported in February 2020.

Non-residential outlays, which held steady at $4.4 billion, remained over 12% below pre-pandemic levels. Following sharp declines from July to October, spending on non-residential buildings has been stable in recent months. Spending on industrial buildings in January was down 12% from levels reported in February 2020, while outlays on commercial buildings were down 17%.

On March 11, the Leading indicator of international arrivals to Canada provided a first glimpse of travel into Canada during February. US residents made 41,200 trips to Canada through land ports with electronic sensors, down 94.5% compared with February 2020, while 130,200 Canadians returned from the United States through these same ports, down 91.9%. Non-residents arriving in Canadian airports equipped with electronic kiosks were down 96.6% year-over-year in February while the number of Canadian residents returning from abroad via these same airports fell 95.6%. Before testing on arrival and a hotel stopover was required as of February 22, the average number of returning Canadians by air was 2,583 per day, reaching 4,065 from February 19 to 21 and then dwindling to 718 after the additional requirements.

The national balance sheet and financial flow accounts for the fourth quarter of 2020 was released on March 12th. Despite the ongoing challenges posed by the pandemic, household sector net worth—the value of all assets less liabilities—rose 3.7% to $12.8 trillion in the fourth quarter. Gains in the value of household financial assets, led by increases in pension wealth and equities, contributed to higher net worth late in the year, as did increases in the value of residential real estate, which surpassed $6 trillion for the first time on record. Over the course of 2020, household net worth has increased by 9.3%.

The latest edition of Canadian Economic News providing a concise summary of selected Canadian economic events, and international and financial market developments, is now available.

Weekly update - Friday, March 5, 2021

Economic activity continued to strengthen at a sturdy pace in late 2020 despite the widespread introduction of tighter containment measures in many regions of the country. Real GDP rose 2.3% in the fourth quarter, supported by large changes in business stockpiles, continued strength in housing market activity, and higher exports. Increased business outlays on machinery and equipment and higher government spending also contributed to the headline gain.

Real GDP growth in fourth quarter exceeded market forecasts, despite the slight decline in household spending which reflected reduced outlays on food and accommodation services, clothing and footwear, and new vehicles. At the same time, household spending on furniture and appliances continued to rise late in the year, and has strengthened markedly in the wake of the initial lockdowns.

December's GDP report showed that output continued to edge higher (+0.1%), despite declines in many high-contact services as lockdown measures tightened. The headline increase at year end largely reflected higher output in mining and oil and gas extraction, stronger housing market activity, and increased activity in the public sector. By contrast, output in accommodation and food services fell for the fourth consecutive month, to about 60% of its pre-COVID level. Retail output fell for the first time in seven months, edging just below levels observed in February of 2020.

On March 1st, the agency released experimental measures of economic well-being that provided new information on the extent to which emergency government transfers contributed to elevated levels of disposable income and saving among different groups of households. The data highlight how extensive these income supports were across household income levels.

The emergency support measures introduced in the second quarter more than compensated for lost wages and salaries during the lockdowns in the second quarter of 2020, irrespective of household income levels. Although a larger proportion of total COVID‑19 support went to middle- and upper-income earners, the impact of benefits were larger for households with lower incomes. Households in the bottom quintile saw their disposable income rise by 33%, while incomes in the top quintile grew by 7%.

As containment measures loosened during the third quarter, COVID support programs augmented the broad-based rebound in wages and salaries as disposable incomes continued to expand. Among top earners, disposable income rose by an additional 5.5%, while households in the middle and bottom quintiles saw more modest gains.

While many households benefitted from these programs, their economic impact was felt among low-income households. Over the first three quarters of 2020, the value of government COVID‑19 support measures represented 16.4% of disposable income for the lowest-income earners, compared with 4.3% among the highest earners.

On February 26, the agency released non-residential capital intentions for 2021. The data indicate that companies are strengthening their capital plans, but that private spending will remain well below pre-pandemic levels. While private organizations expect to spend 5.6% more on structures and machinery and equipment this year than during 2020, anticipated outlays remain 12% below levels reported in 2019, and about 20% below peak levels observed in 2014, prior to the mid-decade collapse in oil prices.

On March 5th, the agency released the merchandise trade report for January. Merchandise exports surged to start the year, up 8.1% on broad-based increases across commodities. Higher exports of aircraft, consumer goods, energy products, and forestry products all contributed to the headline increase. About one-third of the 8.1% gain reflected higher export prices, while the volume of goods exported rose 5.1%. Exports to the United States were up 11.3% to start the year, exceeding levels in February 2020 for the first time since the start of the pandemic.

Imports advanced 0.9%, led by higher imports of energy products. Canada posted its first merchandise trade surplus since May 2019 as the total value of monthly merchandise trade surpassed the $100 billion mark for the first time since August of that year.

Weekly update - Friday, February 26, 2021

Payroll employment increased by 44,200 in December as gains in health care and social assistance and in transportation and warehousing offset continued losses in industries more heavily impacted by tighter public health restrictions. Payroll employment in accommodation and food services fell by 32,900, bringing combined losses in this industry over the last two months of 2020 to nearly 83,000. Employment also fell in arts, entertainment and recreation for the second consecutive month. Retail payrolls were down at year end, following six consecutive monthly increases.

All of the headline increase in payroll employment in December reflected gains among salaried workers. Employment among hourly paid workers edged lower following sharp losses in November. The number of hourly paid workers receiving pay or benefits from their employer at year end was 8.9% below pre-COVID levels, with cumulative losses since February 2020 totaling almost 870,000.

Total payroll employment in December was 6.2% below pre-COVID levels, with net losses since February remaining over one million. Total hours worked were little changed in December and 5.3% below the level reported in February 2020.

Data on job vacancies in December were also released on February 25th. Canadian employers were actively recruiting for an estimated 478,000 positions (not seasonally adjusted) as they continued to navigate public health measures and the threat of COVID‑19. One-fifth of all vacancies were in the health care and social assistance sector. Canada's job vacancy rate, which represents vacant positions as a proportion of all positions (vacant and occupied) was 3.0% in December.

This week also saw a number of transport and travel-related releases that ended a devastating year for travel and tourism. On February 23rd, travel between Canada and other countries reported that arrivals of non-residents to Canada from both the United States and overseas countries were down 93.0% compared to December 2019. Similarly, the number of Canadian residents returning internationally was down 91.3% from December of last year. Over the year, international travel to and from Canada declined to 25.9 million from 96.8 million arrivals in 2019. The travel release included a study on the number of "other travellers", including truck drivers and transport crew members, crossing the border each month during 2020.

On February 24th, Statistics Canada reported that Canadian railways carried 32.4 million tonnes of freight in December, unchanged from the same month a year earlier. Following a strong 6.0% year-over-year increase in November, this signaled a recovery to more seasonal levels after seven straight months of year-over-year declines since March. The total volume of rail freight in 2020 totaled 365.5 million tonnes, a decrease of 5.4% from 2019. Although total tonnage in 2020 was near the five year annual average, COVID‑19 brought a stark change in the commodities moved by rail—most evident in a shift from energy-related commodities to agricultural and food products.

As the year ended with closings of non-essential businesses to combat the second wave of the virus in many parts of the country, COVID had more impact on passenger transportation. On February 25th, the agency reported that public transit networks carried 52.5 million passengers in December, down 65.8% from December of 2019. The industry ended the year with three consecutive months of similar year-over-year declines, with December marking the lowest number of passengers since July 2020. For 2020 as a whole, Canada's public transit networks transported 848.8 million passengers, down over one-half from about 1.9 billion passengers in 2019.

December punctuated a disastrous year for aviation in Canada and around the world as two decades of commercial traffic growth was wiped out in a matter of months. On February 25th, civil aviation statistics reported that the number of passengers carried on scheduled and charter services by major Canadian airlines was down 87.0% from December 2019, while operating revenues fell 80.6% year-over-year. Any glimmer of recovery with the 19.7% increase in passenger volumes from November to December due to higher international traffic soon ended with announcements of flight suspensions to some sun destinations as well as tighter travel restrictions, including a COVID‑19 test for international arrivals with a mandated three-night stay in a government-approved hotel.

Weekly update - Friday, February 19, 2021

Headline consumer inflation rose to the one percent mark in January, supported by higher prices for passenger vehicles and gasoline. Higher auto prices reflected the availability of new model-year vehicles, while gasoline prices rose as production cutbacks in major oil-producing countries have put upward pressure on benchmark crude prices. Consumers also paid more for phones and phone plans in January.

Overall changes in goods prices, measured year-over-year, edged into positive territory in January for the first time since the start of the pandemic, supported by higher prices for consumer durables. Headline consumer inflation has averaged 0.5% since COVID‑19 began impacting the Canadian economy in March 2020, largely reflecting the impact of lower gasoline prices on the headline rate. Excluding gasoline, consumer inflation has averaged 1.1% since the start of the pandemic.

January's consumer prices data also highlight the ongoing divergence between mortgage borrowing costs and new housing costs. Measured month-over-month, mortgage interest costs fell for the ninth consecutive month as lower interest rates continued to put downward pressure on borrowing costs. At the same time, the homeowners' replacement cost index rose for the eleventh consecutive month as strong demand for single-family homes and higher construction costs continue to put upward pressure on new home prices. According to January's new housing price index, released on February 18th, new home prices rose at their fastest monthly pace (+0.7%) since October, as high demand and limited supply continue to fuel price increases in many areas of the country.

On February 19th, Statistics Canada released December's retail report. Sales contracted sharply at year end as public health measures tightened in many regions of the country. Total sales fell 3.4% to $53.4 billion, the lowest level since July. Lower sales at general merchandise stores, clothing and clothing accessories stores, and sporting goods, hobby, book and music stores accounted for two-thirds of the headline decrease. While lower receipts in Ontario accounted for more than two-thirds of the headline decrease, sales fell in every province for the first time since April.

Retail e-commerce sales, measured on an unadjusted basis, reached a record high of $4.7 billion in December. E-commerce sales at year end accounted for 7.8% of total retail trade, the highest share since May.

Despite the pullback in December, overall retail sales remained 2.1% above pre-COVID levels. The agency also released an advance estimate of retail sales for January 2021, which points to a decline of 3.3%.

December's sales report for food services and drinking places, released February 18th, underscores the severe impact that tighter public health restrictions continue to have on many high-contact services. Sales at food services and drinking places fell 8.0% in December, the third consecutive monthly decline. Sales at year end were at their lowest level since June and 35% below pre-pandemic levels. Receipts at full-service restaurants were more than 50% below levels reported in February 2020.

The agency released December's manufacturing report on February 15th. Factory sales rose 0.9% at year end, offsetting the modest pullback in November. Higher sales of wood products, petroleum and coal products, and motor vehicles and parts supported the headline increase.

Sales of wood products, buoyed by rising prices, rose for the seventh time in eight months. Bolstered by strong housing markets in the Canada and United States, sales at year end were 45% above pre-pandemic levels.

Sales of petroleum and coal products advanced for the third consecutive month, supported by higher energy prices. Despite these late-year gains, sales in December remained almost one quarter below pre-pandemic levels.

Following four consecutive monthly declines, sales of motor vehicles and parts rose in December. Sales at year end were 7% below levels reported in February 2020.

After rebounding in May and June as factory activity ramped up after the lockdowns, total manufacturing sales were largely stable over the remainder of 2020. Overall sales in December were 2.9% below pre-COVID levels, largely reflecting lower sales of petroleum and coal products. Excluding petroleum and coal, manufacturing sales in December were 0.6% below levels reported in February.

Weekly update - Friday, February 12, 2021

After seven consecutive monthly increases, wholesale sales fell 1.3% in December on lower sales of motor vehicles and parts. Sales at auto and auto parts wholesalers fell for the second consecutive month to their lowest level since July, reflecting weakness in the domestic demand for Canadian-built vehicles, parts and accessories. Sales in this subsector at year end were 9% below pre-pandemic levels. Lower sales of machinery, equipment and supplies also contributed to the headline decrease.

Despite the pull-back, total wholesale sales in December were still the third highest on record and 3% above pre-COVID levels. Sales at wholesalers rebounded quickly from the lockdowns in the spring, surpassing February levels in July, and then steadily advancing through the late summer and fall months. Higher sales of building material and supplies, and machinery and equipment supported the rebound in wholesale sales. At year end, sales of building materials and supplies were 12% above pre-COVID levels, while sales of machinery and equipment were 7% above levels reported in February.

December's building construction report, released on February 8th, continues to underscore the pandemic's divergent effects on residential and non-residential property markets. Investment in single-unit dwellings has risen markedly since the initial lockdowns, reflecting the shift in buyer preferences towards larger homes.  Outlays on residential dwellings rose 1.9% in December, led by higher spending on singles in Ontario, Quebec and Alberta. With gains in seven of the last eight months, single-unit investment at year end was 14% above pre-COVID levels. Total residential outlays, which include combined spending on singles and multi-unit buildings, rose to a record $11.1 billion in December, 8% above levels reported in February 2020.

While outlays on housing have strengthened, investment in non-residential buildings has contracted in the wake of the lockdowns. Non-residential outlays, which held steady in December at $4.4 billion, remained 13% below pre-pandemic levels. Spending on industrial buildings in December was down 11% from February's level, while outlays on commercial buildings were down 17% as many businesses continue to re-evaluate their commercial property requirements.

On February 9th, Statistics Canada released experimental estimates of economic activity for October. These estimates highlight the slowdown in the pace of the recovery in most provinces and territories as public health restrictions began to tighten in several parts of the country. The pull-back in economic activity in October was most apparent in Quebec where stronger public health restrictions were enacted earlier than in other provinces and territories.

Weekly update - Friday, February 5, 2021

After declining by 53,000 in December, employment fell by 213,000 in January, reflecting sharp losses in Ontario and Quebec. January's headline decrease was entirely in part-time work as total employment fell to its lowest level since August 2020.

Employment declined in three industries most affected by new and continuing public health restrictions—accommodation and food services, retail trade, and information, culture and recreation. Lower employment among young Canadians accounted for about one-half of the headline decrease. Youth employment in January was 14.5% below pre-COVID levels, with female youth continuing to be harder hit than their male counterparts.

Canada's unemployment rate rose to 9.4%, the highest level since August. Cumulative employment losses since the start of the pandemic totaled 858,000.

On February 5th, the agency released December's international merchandise trade report. Merchandise trade continued to slow in December as lower imports moderated higher exports. At $96.3 billion, total merchandise trade was 2.0% below pre-COVID levels.

Headline exports rose 1.5% in December, supported by higher prices for crude oil. Exports of energy products rose 10.2%, the seventh increase in the last eight months. Despite these gains, energy exports remained 8.2% below pre-COVID levels, while total merchandise exports were 1.9% below levels observed in February 2020.

Headline imports edged down 2.3% in December, falling below pre-COVID levels for the first time since September. Lower imports of consumer products contributed to the headline decrease.

Canada's international trade in services edged lower in December, reflecting lower trade in commercial services. Canada's trade in services remained one-quarter below pre-COVID levels, largely reflecting lower receipts and payments for travel services.

A study released on February 2nd highlighted how COVID‑19 affected the composition of Canada's merchandise imports during the first half of 2020. Using a classification structure that distinguishes between the different end-uses for imported products, the report outlines the extent to which imports of capital goods, intermediate goods, and consumption goods were all impacted by the pandemic, particularly those related to transport equipment and travel services. The study, Impact of COVID‑19 on merchandise imports: evidence based on end-use goods, also highlights how the pandemic affected the supply chains for various commodities, often via altering the supply of imports coming from the U.S. and China.

At the end of January, Statistics Canada released two reports on aviation, both for November. The total number of aircraft movements (i.e. take-offs and landings) across Canada was down 26.6% from November 2019. The month featured two notable pandemic-related developments. First, Kitchener/Waterloo in Ontario was Canada's busiest airport with 13,619 take-offs and landings, mostly local traffic including private operators and flight schools. Second, itinerant movements (i.e. from one airport to another) at Hamilton International in Ontario increased year-over-year (+0.4%) in November for the first time since March, largely resulting from cargo traffic and a surge in helicopter movements, shuttling Canadian snowbirds over the US–Canada border.

The agency's civil aviation report signaled that the air travel recovery appeared to stall in November, with major Canadian airlines carrying 780,000 passengers on scheduled and charter flights. This was down 87.3% from the same month in 2019 and down 12.0% from October 2020, somewhat larger than a typical seasonal decline. As in previous months, most travel was domestic as international demand remained generally weak amid border travel restrictions and enforcement of quarantines. However, two more major air carriers that operate mostly international flights resumed limited services in November. While domestic air travel declined from October, international travel in November actually increased.

On January 25th, the agency released business openings and closures for October. Business openings (41,900) exceeded closures (32,400) for the fourth consecutive month as the number of active businesses edged up 0.6%. The growth in active businesses has slowed in recent months as closures have risen while openings have declined. The total number of active businesses in October was 6.7% below pre-COVID levels. In accommodation and food services, the number of active firms was just over 10% below levels reported in February 2020.

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Weekly update - Friday, January 29, 2021

Economic activity rose for the seventh consecutive month in November, supported by increases in mining, oil sands extraction, and factory output. Real gross domestic product increased 0.7%, following the 0.4% gain in October. Total economic activity in November was 3.5% below pre-COVID levels.

Oil sands extraction rose for the third consecutive month as a number of facilities restarted production. Output in the oil sands remained about 5% below pre-COVID levels. Support activities for mining and oil and gas extraction rose for the fifth consecutive month but remained over 40% below pre-COVID levels.

Manufacturing output increased for the sixth time in seven months, and was about 3% below levels observed prior to the pandemic.

Output in service industries that were among the most impacted by the pandemic remained well below February levels. Despite a 6% increase in accommodation services in November, activity was almost 40% below pre-COVID levels. Activity among food services and drinking places fell for the third consecutive month as public health measures tightened, and was down over 30% from pre-COVID levels. While air transportation posted a notable gain in November, output remained 83% below levels observed in February.

Retail trade strengthened in November, and was 3.5% above levels reported in February. At the same time, activity among real estate agents and brokers declined for the second consecutive month after reaching a peak in September. Nonetheless, activity among agents and brokers was almost 30% above February levels.

Statistics Canada also released an advance estimate of real GDP for December, with preliminary information pointing to a 0.3% increase.

November's payroll employment report was released on January 28th. Payroll employment fell as public health measures tightened in many areas of the country. Nationally, the number of employees receiving pay or benefits from their employer declined by nearly 80,000, the first decrease since May. Losses were concentrated in Quebec, Ontario, Alberta and Manitoba.

Payrolls fell in industries that were directly affected by tighter public health measures. Employment in accommodation and food services was down by over 48,000, while payrolls in arts, entertainment and recreation services declined by almost 9,000. Payrolls in both these industries were about 30% below levels observed prior to the pandemic.

All of the headline losses in November reflected lower employment among hourly paid workers, who have been relatively hard hit by the pandemic. The number of hourly paid workers receiving pay or benefits from their employer was 8.7% below pre-COVID levels, with cumulative losses since February totaling almost 850,000.

Total payroll employment in November was 6.6% below pre-COVID levels, with net losses since February totaling over 1.1 million.

Data on job vacancies in November were also released on January 28th. Canadian employers were actively recruiting for an estimated 523,000 positions (not seasonally adjusted) as they continued to navigate public health measures and the threat of COVID‑19. More than one-fifth of all vacancies were in the health care and social assistance sector. Canada's job vacancy rate, which represents vacant positions as a proportion of all positions (vacant and occupied) was 3.3% in November.

On January 27th, Statistics Canada reported railway traffic for November, when Canadian railways carried 32.1 million tonnes of freight, an increase of 6.0% compared with November 2019. This marked the first year-over-year increase since March, with overall tonnage in November just below the peak reached in 2018. However, with a labour dispute affecting rail transport during November 2019, it is not possible to attribute all of the year-over-year growth to a post-pandemic recovery. In terms of commodities, loadings of agricultural and food products have increased while energy-related products continue to experience declines.

On January 28th, the agency released data on urban transit for November, when ridership was 64.2% (or 105.8 million trips) below November 2019 levels. This was the eighth consecutive month of steep year-over-year declines, each less severe, signaling a slow recovery until an abrupt stop in October.

Following steady passenger gains during the summer, the recovery in transit stalled for the second straight month, edging down in November. This coincides with stricter COVID-related restrictions in some areas of the country.

Weekly update - Friday, January 22, 2021

Consumer price inflation slowed to 0.7% in December after reaching the one percent mark in November for the first time since the start of the pandemic. Slower price growth for food and lower air transportation prices contributed to the deceleration in the headline rate. Consumer inflation has averaged 0.4% since COVID‑19 began impacting the Canadian economy in March.

Overall changes in goods prices, measured year-over-year, remained in negative territory in December for the tenth consecutive month as lower gasoline prices continued to weigh on the headline rate. While gas prices rose from November to December, prices at the pump were 8.5% lower than in December of 2019 as COVID-related restrictions have sharply dampened global demand. Prices for consumer durables at year end were 2.2% higher than in December of last year.

December's inflation report also highlighted the continued divergence in mortgage interest costs and homeowners' replacement costs. Measured month-over-month, mortgage interest costs fell 1.0%, the eighth consecutive monthly decline as lower interest rates continued to put downward pressure on borrowing costs. At the same time, the homeowners' replacement cost index, which reflects prices for new homes, rose 0.7%, the tenth consecutive monthly increase as strong demand for single-family homes and higher building material costs put upward pressure on new home prices.

Earlier in the month, the agency released consumer price data based on an adjusted index that reflects changes in spending patterns since the onset of the pandemic. Estimates based on this adjusted index are available up to reference month November. This index shows slightly faster price growth than the official headline rate. In November, the year over-year change in the adjusted index was 1.4%, while headline inflation stood at 1.0%. The gap between the two indexes has remained at 0.4 percentage points since September.

November's retail report was released on January 22nd. Retail sales rose 1.3%, supported by higher sales at food and beverage stores and an uptick in e-commerce sales. November's headline gain marked the seventh consecutive monthly increase as total sales exceeded pre-COVID levels by 5.6%.

The reintroduction of physical distancing measures directly affected the retail sector. Based on respondent feedback, approximately 3% of retailers were closed during November, on average, for one business day. Retail e-commerce sales reached $4.3 billion, accounting for 7.4% of total retail trade—the largest share since May. The rise in e-commerce sales coincided with retailers urging online shoppers to buy early to avoid shipping delays, as well as promotional events such as Black Friday.

Statistics Canada also released an advance estimate of retail sales for December, which point to a decline of 2.6%.

The agency released November's manufacturing report on January 19th. Factory sales fell for the first time in three months, declining 0.6% to $53.7 billion. Lower headline sales in November reflected declines in transportation equipment as aerospace production and motor vehicle sales both decreased. Sales of transportation equipment have fallen in three of the last four months and were about 16% below levels observed in February. Overall manufacturing sales in November were 3.8% below pre-COVID levels.

The agency also released November's wholesale trade report on January 19th. Wholesale sales rose 0.7%, advancing for the seventh consecutive month as sales exceeded pre-COVID levels by 4.4%.

Travel between Canada and other countries for November was released on January 22nd. With restrictions on non-essential travel in place and a mandatory 14-day quarantine period for Canadians returning from abroad, volumes remained low. Non-resident travel to Canada from the United States and overseas countries was down 92.9% from November 2019. Similarly, the number of Canadian residents returning from other countries was down 92.1% on a year-over-year basis.

Despite the ongoing the travel restrictions, the number of Canadians returning from the U.S. and abroad increased from October to November. In all, 42,200 Canadians returned from the United States by plane in November, up 29% from October, while 73,200 Canadian residents returned home from travel overseas, which also exceeded October levels.

Weekly update - Friday, January 15, 2021

On January 13th, Statistics Canada released new data on cross-border travel. December’s leading indicator of cross-border traveller volume showed that the number of American residents and returning Canadians crossing the Canada-U.S. border by automobile remained low. With restrictions on non-essential travel still in effect, crossings were down by more than 90% from levels observed in December of 2019. In 2019, more than 270,000 Canadian residents returned home from the United States during the weekend following Christmas Day (December 28th to 30th). In 2020, only 146,000 Canadian residents crossed back into Canada by automobile during the entire month of December.

The leading indicator of international arrivals to Canada by air for the fourth quarter was also released. The total number of international arrivals (i.e. non-residents and returning Canadians) remained far below pre-pandemic levels. Just over 71,000 non-residents (from the United States and overseas) arrived at Canadian airports from October to December. During these months, 217,100 Canadian residents returned home by air, with a discernible uptick in December. The average daily travel volume rose from 1,883 in October to 2,165 in November, and then to 3,025 in December, a month when 93,800 Canadians returned from abroad by air.

On January 12th, the agency released investment in building construction for November. Outlays on residential dwellings edged down 0.1% as higher spending on single units was offset by lower investment in multi-unit dwellings. November’s slight decline followed six months of steady increases in total residential outlays, which, at $10.8 billion, remained 5.5% above pre-COVID levels.

Outlays on non-residential construction were unchanged in November as higher spending on institutional and industrial building was offset by lower investment in commercial buildings. Following four months of steady declines, total non-residential outlays, at $4.4 billion, were nearly 13% below pre-COVID levels. Spending on commercial buildings was at its lowest level since the April lockdown.

Weekly update - Friday, January 8, 2021

Employment contracted by 63,000 in December as tighter public health measures went into effect in various parts of the country. December’s headline decrease, which reflected losses in part-time work and self employment, marked the first monthly decline since the lockdowns in April. Employment fell in Nova Scotia, Saskatchewan, Manitoba and Prince Edward Island and held steady in the other six provinces.

Employment in the service sector declined by 74,000, reflecting losses in industries that are heavily impacted by public health restrictions. Employment fell in accommodation and food services, other services, and information, culture and recreation industries.

Youth employment contracted in December, as part-time losses (-58,000) offset gains in full-time work (+32,000). Youth employment remained over 10% below pre-COVID levels, with female youth continuing to be harder hit than their male counterparts.

Canada’s unemployment rate edged up slightly to 8.6%, after peaking at 13.7% in May.

After peaking at 5.5 million in April, the total number of Canadian workers directly affected by the COVID‑19 economic shutdown, either through lost employment or substantial reductions in hours worked, stood at 1.1 million in December.

On January 7th, the agency released November’s international merchandise trade report. Merchandise trade slowed in November as lower imports moderated higher exports. At $96.9 billion, merchandise trade was 1.4% below pre-COVID levels. Much of the net decline since February reflected lower trade in energy products and aircraft and other transportation equipment, which both remained well below pre-COVID levels.

The divergent trend between Canada's trade with the United States and with other countries continued in November. Total trade with countries other than the U.S. rose 2.1%, reaching a record $33.1 billion. Total trade with the United States fell 1.0% to $63.8 billion, the lowest level since June.

Headline exports rose 0.5% in November, supported by higher exports of gold to the United Kingdom. At $46.8 billion, total exports were 3.1% below levels observed in February. Energy exports rose for the sixth time in the last seven months but remained 16.5% below pre-COVID levels. Exports of motor vehicles and parts fell for the third time in the last four months, and were 6.1% below levels observed in February.

Headline imports edged down 0.3% in November but remained slightly above pre-COVID levels. Lower imports of industrial machinery contributed to the headline decrease.

Imports of medical and protective goods rose in November after two consecutive monthly declines. Imports of these products are up 46% on a year-over-year basis.

Canada’s international trade in services edged higher in November, marking the third increase in the last four months. Despite these gains, trade in services remained over one-quarter below February’s level, largely reflecting lower receipts and payments for travel services.

The agency released the national tourism indicators for the third quarter on January 8th. Although tourism spending in Canada rose 56.4% in the third quarter, it only partly offset the second quarter decline (-65.0%). While tourism's share of GDP improved to 1.0% in the third quarter, it remained lower than pre-pandemic levels (2.0%). Third quarter employment attributable to tourism rose 27.1%, driven mainly by gains in food and beverage services and accommodation, but partly offset by losses in air transportation. Domestic tourism accounted for nearly all of total tourism spending in the third quarter.

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Weekly update - Thursday, December 24, 2020

Economic activity increased for the sixth consecutive month in October, led by gains among service industries. Real gross domestic product rose 0.4%, following the 0.8% increase in September. Higher output in professional, scientific and technical services, finance, and public service industries supported the headline gain. Total economic activity in October was about 4% below pre-COVID levels.

Output in several industries that were among the most impacted by the pandemic remained well below pre-COVID levels. Activity in accommodation and food services fell for the second consecutive month as momentum built up through the late spring and summer continued to dissipate. Output in this sector in October was down 31% from levels observed in February. Similarly, despite five consecutive monthly increases, activity in arts, entertainment and recreation industries remained 44% below pre-COVID levels.

Retail trade continued to strengthen in October, advancing for the sixth consecutive month. Output in the retail sector was 2.5% above levels reported in February. At the same time, activity among real estate agents and brokers pulled back slightly, after reaching a peak in September. Nonetheless, activity among agents and brokers was 32% above February levels.

Statistics Canada also released an advance estimate of real GDP for November, with preliminary information pointing to a 0.4% increase.

Payroll employment continued to rebound in October, albeit at a slower pace, as COVID-related public health restrictions had begun to tighten in parts of central Canada. Nationally, the number of employees receiving pay or benefits from their employer rose by 183,700, about one-half of September’s reported increase. Gains across industries were broad-based as all provinces except for New Brunswick reported higher payrolls. October’s headline gain brought total payroll employment to within 6.1% of pre-COVID levels, with net losses since February totaling just over one million.

About two-thirds of October’s increase in payroll employment reflected gains among hourly paid workers, who have been relatively hard hit by the pandemic. The number of hourly paid workers receiving pay or benefits from their employer in October was 8.1% below pre-COVID levels, with cumulative losses since February totaling almost 800,000.

November’s new housing price index was released on December 21st. New home prices continued to rise at a brisk pace across much of the country as strong momentum in housing markets extended into late fall. Nationally, prices for new home rose 0.6%, with home builders in 21 of the 27 census metropolitan areas reporting increases. Since the beginning of the pandemic in March, new home prices have risen by 3.7%, supported by a shift in buyer preferences toward single-family homes, coupled with lower borrowing costs. According to the consumer price index, mortgage interest costs, measured on a month-over-month basis, have fallen for seven consecutive months, with November’s decrease marking the largest decline in over 26 years. Upward pressure on new home prices has been apparent in all provinces except Saskatchewan and Alberta.

There were several data releases this week related to travel, transportation and food services. On December 21st, the agency reported that, while the volume of rail freight continued to move closer to pre-pandemic levels in October, overall tonnage was down 7.1% since January when compared to the same 10-month period last year. Loadings of fuel oils and crude petroleum as well as gasoline and aviation fuel were down by more than 50% from levels observed last October. Large increases in loadings of some agricultural and food products, including canola and other cereal grains, helped offset declines in energy products.

On December 22nd, Statistics Canada reported that, after climbing steadily each month following the drastic plunge last April, urban transit ridership dipped slightly in October. As a result, total operating revenues excluding subsidies remained almost two-thirds below the same month last year. The first signs of a second wave have also stalled any recovery of the Canadian airline industry. The agency reported on December 22nd that, in October, operating revenue earned by the largest air carriers was down 82.6% from the $1.9 billion earned in October 2019. The outlook remains bleak with countries further restricting air travel in response to a second wave.

Statistics Canada also reported that arrivals to Canada from both the United States and overseas countries were down almost 95% in October, compared to the same month last year.

With the extension of travel restrictions and tighter public health measures in some provinces, sales reported by food services and drinking places in October were not encouraging. Following five consecutive monthly gains, sales in restaurants and bars fell almost 9% from September to October. Establishments in Ontario and Quebec both reported 30% declines in year-over-year (unadjusted) sales.

Weekly update - Friday, December 18, 2020

Consumer price inflation accelerated in November, reaching the one percent mark for the first time since the start of the pandemic. The headline rate has averaged 0.4% since COVID‑19 began impacting the Canadian economy in March.

Overall changes in goods prices, measured year-over-year, remained in negative territory in November for the ninth consecutive month as lower gasoline prices continued to weigh on the headline rate. Gasoline prices were down nearly 12% on a year-over-year basis as the tightening of COVID-related restrictions continued to dampen global demand. At the same time, prices for consumer durables, supported by higher prices for furniture and household appliances, were 1.7% higher than in November of last year.

November’s consumer inflation report also highlighted movements in housing-related prices, as mortgage interest costs and homeowners’ replacement costs continued to diverge. Measured month-over-month, mortgage interest costs fell 0.9%, the seventh consecutive monthly decline as lower interest rates continued to put downward pressure on borrowing costs. At the same time, the homeowners’ replacement cost index, which reflects prices for new homes, rose 1.1%, the ninth consecutive monthly increase as strong demand for single-family homes and higher building material costs put upward pressure on new home prices.

Retail sales continued to advance in October, albeit at a slower pace. Headline sales edged up 0.4%, the six consecutive monthly increase, led by higher sales at motor vehicle and parts dealers. October’s retail report, released on December 18th, also pointed to higher sales at sporting goods, hobby, book and music stories, furniture and home furnishing stores, as well as at building material and garden equipment and supplies dealers.

Total retail sales in October were 4.5% above pre-COVID-levels, with nine out of eleven subsectors reporting sales that exceeded levels in February. Headline sales have been above pre-COVID levels since June.

Measured on an unadjusted basis, retail e-commerce sales reached $3.1 billion in October, accounting for 5.2% of total retail trade. Retail e-commerce sales were up by two-thirds on a year-over year-basis, while total unadjusted retail sales increased by 9.1%.

Statistics Canada also released an advance estimate of retail sales in November, which suggests that headline sales were relatively unchanged.

The agency released October’s manufacturing report on December 15th. Factory sales edged up 0.3%, supported by higher sales at pulp, paper and paperboard mills. Higher sales of petroleum and coal products, led by rising prices, also contributed to the headline gain.

Overall manufacturing sales in October were 3% below pre-COVID levels, largely reflecting lower sales of petroleum and coal products, which, despite gains in four out of the last six months, remained nearly 30% below pre-COVID levels.

Following two consecutive monthly increases, total manufacturing inventories declined in October on lower inventories of transportation equipment. Unfilled orders also fell on lower orders of aerospace products and parts.

On December 16th, the agency released October’s wholesale trade report. Wholesale sales rose 1.0%, advancing for the six consecutive month as sales exceeded pre-COVID levels by 3.3%. Six out of seven wholesale subsectors reported sales that exceeded February levels.

On December 18th, the agency released aircraft movement statistics for October. With ongoing border and travel restrictions, the number of itinerant movements (i.e. from one airport to another) fell by 41.5% in October compared to the same month last year. Domestic traffic was down 34.2%, but more so with the United States (-84.2%) and other international destinations (-69.4%). Despite some carriers adding flights to sun destinations in October and the resumption of service by other carriers in November, the outlook remains grim for the travel industry.

The agency resumed publishing Employment Insurance statistics on December 17th. Measured on a seasonally adjusted basis, 1.4 million Canadians received regular EI benefits in October, more than triple the number reported in February. Data from the Labour Force Survey indicate that there were 1.8 million unemployed in October, including 1.5 million who were looking for work and 300,000 who had a connection to a job, either because they were on temporary layoff or had arrangements to begin a new job in the near future.

Upcoming releases: Railway carloadings for October, and new housing prices for November, will be released on December 21st. Payroll employment, earnings and hours, and sales of food services and drinking places, both for October, will be released on December 22nd. October’s GDP report will be released on December 23rd.

Weekly update - Friday, December 11, 2020

The household balance sheet continued to strengthen in the third quarter, buoyed by increases in the value of financial assets and housing. Household net worth, the value of assets less liabilities, rose 3.0% to $12.3 trillion, following the record rebound in the second quarter. Household disposable income and savings remained at elevated levels as rising wages coupled with government transfers offset a strong rebound in spending. Household disposable income in the third quarter was over 9% higher than in the fourth quarter of last year.

Higher equities and increases in the value of residential real estate were both major contributors to the increase in household net worth. Equities were bolstered by increases in the value of mutual fund shares, while strong sales volumes spurred price growth in the housing market.

Household credit market borrowing rebounded in the third quarter, as the demand for both mortgage and non-mortgage loans increased. The household debt service ratio rose to 13.22%, while household credit market debt as a proportion of household disposable income rose to 170.7% following the record decline in the second quarter. By comparison, the ratio of credit market debt to disposable income was 181.0% in the fourth quarter of last year.

On December 7th, the agency released data on investment in building construction for October. Outlays on residential dwellings edged up 0.7%, advancing for the sixth consecutive month. Higher spending on single-unit dwellings led the gain, with all provinces reporting increases expect for Prince Edward Island. Total outlays on residential construction, at $10.9 billion, were 5.7% above pre-COVID levels.

In contrast, non-residential outlays fell 3.2% to $4.4 billion, the fourth consecutive monthly decline. While the pull-back in October largely reflected lower spending in Quebec, non-residential outlays fell in all provinces except for Prince Edward Island. Overall spending on commercial, industrial and institutional buildings fell to its lowest level since the April lockdowns and was 13.5% below pre-COVID levels.

On December 7th, Statistics Canada also released experimental indexes of economic activity in the provinces and territories for August. These data highlight the increase in economic activity in all provinces and territories during the summer months as COVID-related restrictions continued to ease. By August, overall activity in most provinces remained below pre-COVID levels, most notably in Alberta. Economic activity in Saskatchewan, Ontario and British Columbia was also substantially affected by the pandemic.

Final estimates from the National Travel Survey, released on December 9th, indicated that Canadian residents made a total of 313 million trips in 2019, when the pandemic was not yet a consideration. Year-over-year, Canadians took slightly fewer trips domestically, while the number of trips to overseas countries (other than the United States) rose 4.0%. In 2020, the impact of COVID‑19 was felt foremost on travel. On December 10th, the agency reported the leading indicator of travel across the Canada-United States land border during this November. As restrictions on non-essential travel remained in effect, U.S. residents made just 53,300 trips to Canada in automobiles during the month, down 93.7% from November 2019, while the number of Canadians returning by automobile was 136,900, down 92.5%.

Weekly update - Friday, December 4, 2020

Employment growth continued to slow in November as targeted public health measures designed to address the recent surge in COVID‑19 cases continued to be introduced in various parts of the country. Employment rose by 62,000 in November, all on increases in full-time work. Gains in construction, transportation and warehousing, and retail trade were offset by losses in information, culture and recreation services, and accommodation and food services. November’s headline gain brought total employment to within 574,000 of its pre-COVID level.

Employment rose in Ontario, British Columbia and throughout Atlantic Canada. Growth in Ontario slowed as employment in the Toronto CMA was unchanged after increasing for five consecutive months. Employment in Quebec was little changed for the second consecutive month.

Canada’s unemployment rate fell to 8.5%, after peaking at 13.7% in May. The unemployment rate among core-age workers remained at 7.1%, while the rate among young Canadians declined to 17.4%. In all, 1.7 million Canadians were unemployed in November, compared to 1.1 million in February.

After peaking at 5.5 million in April, the total number of Canadian workers directly affected by the COVID‑19 economic shutdown stood at one million in November. This includes net employment losses of 574,000 along with an increase of 448,000 in the number of Canadians who were employed but working less than half their usual hours.

On December 4th, the agency released October’s international merchandise trade report. Merchandise trade continued to strengthen in October as both exports and imports advanced. At $96.7 billion, merchandise trade in October was 1.5% below pre-COVID levels. Much of the decline in the total value of trade since February reflected decreases in energy products and aircraft and other transportation equipment.

Headline exports rose 2.2% in October, supported by a sharp rebound in exports of pharmaceutical products to the United States. Higher exports of energy products also contributed to the headline gain. Total merchandise exports in October were 3.6% below pre-COVID levels.

Merchandise imports rose 1.9% in October, exceeding February levels for the first time since the pandemic began. Higher imports of electronic products and consumer goods contributed to the headline increase.

The GDP report for the third quarter, released on December 1st, highlighted the strong resurgence in economic activity as COVID-related restrictions eased and businesses reopened. Real gross domestic product rose 8.9% in the third quarter, following the record 11.3% contraction in the second. Despite the sharp rebound, economic activity in the third quarter was over 5% below levels observed in the fourth quarter of last year.

Stronger household outlays, led by higher spending on consumer durables and services, contributed substantially to the resurgence in the third quarter. Buoyed by pent-up demand, household expenditures on durables rose by 38.0%, led by increased spending on trucks, vans and sport utility vehicles, and cars. Outlays on services rose 9.6%, led by higher spending on food and beverage services.

Investment in housing rose by a record 30.2% in the third quarter, supported by increases in resale activity, renovations and new construction. Total housing investment in the third quarter was about 10% higher than in the fourth quarter of last year.

While non-residential business investment picked up in the third quarter, business outlays on non-residential structures and machinery and equipment remained over 13% below levels observed in late 2019.

Export and import volumes also rebounded sharply in the third quarter, led by higher shipments of motor vehicles and parts as auto-related trade normalized following severe disruptions during the lockdowns in the spring. Despite strong gains, total export and import volumes were both down about 9% from levels observed in the fourth quarter of last year.

Income support programs continued to have a marked impact on household disposable income and savings in the third quarter. While employee compensation strengthened as more people returned to work, household disposable income fell just over 3% as fewer Canadians relied on support programs. Despite this decline, government transfers to households remained at evaluated levels, which coupled with the increase in employee compensation, helped offset the rebound in consumer spending, leading to evaluated levels of household saving in the quarter. As a result, the household savings rate stood at 14.6%, down from 27.5% in the second quarter. In late 2019, the household savings rate stood at 2.0%.

Large quarter-over-quarter changes in output and hours worked also continued to have a marked impact on estimates of business productivity. After a record increase in the second quarter, productivity fell 10.3% in the third as hours worked rebounded faster than business output. Small and medium-size businesses recovered more hours lost in the third quarter than large enterprises. The reallocation of hours worked in favour of smaller businesses, for which economies of scale are limited, contributed to the sharp decline in business productivity.

September’s GDP report illustrated that economic activity continued to rebound after the historic declines in March and April. Real gross domestic product rose 0.8% in September, following the 0.9% gain in August. Increases in oil and gas extraction and manufacturing output contributed to the gain, as did increased public sector activity and higher output among professional, scientific and technical services. After five consecutive months of growth, total economic activity in September remained about 5% below pre-pandemic levels observed in February.

Statistics Canada also released an advance estimate of real GDP for October, with preliminary information pointing to a 0.2% increase.

The latest edition of Canadian Economic News providing a concise summary of selected Canadian economic events, and international and financial market developments, is now available.

Weekly update - Friday, November 27, 2020

Payroll employment continued to rebound in September, while the pace of the recovery slowed among hourly paid workers. The number of employees receiving pay or benefits from their employer rose by 337,500 in September, following a similar increase in August. Gains across industries were broad-based, led by increases in accommodation and food services, health care and social assistance, and retail trade. All provinces reported higher payrolls, led by increases in Ontario, Quebec, and British Columbia. September’s headline gain brought total payroll employment to within 7.3% of pre-COVID levels, with net losses since February totaling 1.2 million.

Gains among hourly paid workers slowed in September, as payroll employment among this group rose by 54,900, less than one-third of the increase reported for salaried workers. Employment losses since the onset of the pandemic remain concentrated among hourly paid workers, who tend to earn substantially less than salaried employees. In September, the number of hourly paid workers receiving pay or benefits from their employer was 9.4% below pre-COVID levels, with cumulative losses since February totaling over 920,000.

On November 23rd, Statistics Canada released travel between Canada and other countries for September. With restrictions on non-essential travel still in effect during the month, travel to Canada from the United States and overseas countries was down roughly 95% compared with September of last year. Similarly, with a mandatory 14-day quarantine period for Canadians returning from abroad, the number of returning residents in September was down almost 93% from the same month last year.

On November 24th, the agency reported the September sales for food services and drinking places. Overall sales were up almost 2% from August on higher sales among full-service restaurants (+2.9%) while receipts declined at drinking places (-3.2%). Nevertheless, on a year-over-year (and seasonally unadjusted) basis, sales in September were down by one-fifth, with Ontario, Quebec and British Columbia reporting the largest declines in both dollar and percentage terms.

Data on monthly railway carloadings in September were released on November 25th. After recording five consecutive months of double-digit annual declines, Canadian railways carried 31 million tonnes of freight, down slightly (-1.2%) from last September. The improvement reflected strong growth in agriculture and food products, notably canola, which helped to offset continued declines in energy-based products. Loadings of fuel oils and crude petroleum as well as gasoline and aviation fuel both declined by more than 60% from September 2019.

Aircraft movement and civil aviation statistics were both released on November 26th. During September, the number of itinerant take-offs and landings (flights from one airport to another) was down about 40% from last September, with American and other international traffic plunging 85% and 74%, respectively. Major Canadian airlines carried about 914,000 scheduled and charter passengers in September. While this represented a typical seasonal decline of about 16% from August, passenger volumes were almost 87% below the same month last year. The $315.7 million in operating revenue earned by these carriers was down sharply (-85%) from last September’s $2.1 billion and there is little indication of clear skies ahead with the number of COVID‑19 cases rising.

On November 26th, the agency released data on business openings and closures for the August reference month. Openings outpaced closures for the second consecutive month as restrictions across the country continued to ease. Business openings in August totaled 40,700, while closures totaled 34,100. Nevertheless, the total number of active businesses in August was 9.0% below pre-pandemic levels. Of the 17% of businesses that were operating in February that closed in March and April, 56% had reopened by August.

The agency also released new data on business openings and closures for tourism industries that highlight the severe impact of the pandemic on tourism-related activity. While closures in the business sector doubled from February to April 2020, the number of closures in tourism industries more than tripled over this period.

Weekly update - Friday, November 20, 2020

Headline consumer inflation accelerated to 0.7% in October, mainly due to higher food prices. Led by higher prices for fresh vegetables and meat, food prices rose 2.3% on a year-over-year basis, up from 1.6% in September.

Changes in goods prices, measured year-over-year, remained in negative territory in October for the eighth consecutive month as lower prices for gasoline continued to weigh on the headline rate. Excluding gas prices, consumer inflation was 1.0%, matching the rate in September. Services price growth slowed to 1.2% in October as prices for traveller accommodation fell less in October than in September. Prices for traveller accommodation, however, were nearly 23% below prices observed in October of last year.

October’s consumer inflation report also highlighted notable movements in housing-related prices, as interest costs and replacement costs continued to diverge. Measured on a month-over-month basis, mortgage interest costs fell 0.7%, as mortgage rates continue to face downward pressure following reductions in the Bank of Canada's policy interest rate in March. At the same time, the homeowners' replacement cost index, which reflects prices for new homes, rose 1.4%, the largest monthly increase since June 1991.

October’s new housing price index, released on November 20th, highlighted the strong momentum in housing markets across the country. Nationally, prices for new homes rose 0.8% with home builders in 21 out of 27 census metropolitan areas reporting increases. Since the beginning of the pandemic in March, new home prices have risen 3.1%, supported by lower borrowing costs as buyer demand shifted towards larger homes. In comparison, new home prices edged up 0.1% from March to October of last year.

September’s retail trade report was also released on November 20th. Retail sales rose 1.1%, supported by higher sales at motor vehicle and parts dealers, general merchandise stores and food and beverage stores. September’s headline gain was the fifth consecutive monthly increase since the lockdowns in April. Monthly retail sales have exceeded pre-pandemic levels since June.

Retail e-commerce sales, unadjusted for seasonality, reached $3.2 billion in September, accounting for 5.6% of total retail trade. Measured year-over-year, e-commerce sales were up nearly 75% in September, while total unadjusted retail sales increased by 9.3%.

Statistics Canada also released an advance estimate of retail sales in October. Preliminary information suggests that October sales were relatively unchanged from levels reported in September.

September’s manufacturing report was released on November 16th. Factory sales rose 1.5% on higher volumes, offsetting the pullback in August. Higher sales of wood and chemical products contributed substantially to the headline gain, while food sales also increased. Total manufacturing sales in September were 3.6% below pre-COVID levels.

Sales of wood products advanced for the fifth consecutive month, buoyed by strong housing markets in Canada and the United States. Sales of wood products manufacturers in September were over 30% above pre-COVID levels, bolstered by rising lumber prices and higher volumes.

Higher pharmaceutical and medicine sales led gains among chemical manufacturers. Sales of chemical products rose for the fourth consecutive month, surpassing pre-COVID levels. Sales among food manufacturers also increased, and have exceeded pre-COVID levels since June.

Following five consecutive monthly declines, unfilled orders rose in September on higher orders for transportation equipment and primary metals. Manufacturing inventories rose for the second consecutive month.

On November 17th, the agency released September’s wholesale trade report. Wholesale sales rose 0.9%, remaining above pre-COVID levels for the third consecutive month. Higher sales of food products and pharmaceuticals and pharmacy supplies led the gain. Wholesale inventories also rose for the second consecutive month.

Weekly update - Friday, November 13, 2020

On November 9th, the agency released data on investment in building construction for September. Outlays on residential dwellings edged up 1.6%, advancing for the fifth consecutive month. Higher spending on multi-unit buildings accounted for the gain, led by increases in Manitoba and Quebec. Total outlays on residential construction, at $10.7 billion, were over 4% above pre-COVID levels.

In contrast, non-residential outlays fell 8.5% to $4.5 billion in September, the third consecutive monthly decline. Lower outlays in Ontario and Quebec contributed substantially to the pull back in non-residential spending. Overall spending on commercial, industrial and institutional buildings fell to its lowest level since the April lockdowns and was over 10% below pre-COVID levels.

On November 12th, the leading indicator of travel across the Canada-United States border was released for October. The number of American residents and returning Canadians crossing the border from the United States by automobile remained low in October as restrictions on non-essential travel continued throughout the month. The roughly 65,000 American travellers entering Canada by automobile was down 93.5% compared with October 2019.

Similarly, the nearly 160,000 Canadians returning from the United States by automobile was 92.1% lower than levels observed in October of last year. Restrictions on non-essential travel across the border, which initially took effect in March, have been renewed until at least November 21, 2020.

On November 13th, the agency released new data from the Canadian Survey on Business Conditions. From mid-September to late October, the survey collected information from businesses on how the pandemic affected their operations during the summer months, and on their outlook going forward.

About three-quarters of businesses reported that they expect to retain the same number of employees over the next three months and had the cash or liquid assets required to operate. Conversely, over two-fifths of businesses reported that they could not take on more debt, while 5.2% were actively considering bankruptcy or closure.

The outlook for many businesses remains uncertain. Close to one-third of businesses reported that they did not know how long they could continue to operate at current revenue and expenditure levels before considering further staffing actions, closure or bankruptcy, while nearly one-fifth reported they could continue for less than six months.

The survey also highlights the impact of the pandemic on businesses that provide accommodation and foods services, or arts, entertainment and recreation services. Larger numbers of businesses in these sectors expect to reduce the size of their workforce over the next three months. Similarly, about 30% of these businesses reported that they could continue to operate at current revenue and expenditure levels for less than six months before considering further staffing actions, closure or bankruptcy.

October’s consumer price index will be released on November 18th, and the new housing price index for October on November 20th

Weekly update - Friday, November 6, 2020

Employment growth slowed in October as several provinces tightened public health measures in response to a spike in COVID‑19 cases. Employment rose by 84,000, led by an increase in full-time work. Gains in professional, scientific, and technical services and in retail trade were partly offset by lower employment in accommodation and food services, with losses in this sector concentrated in Quebec. October’s headline gain brought total employment to within 636,000 of its pre-COVID level.

Higher employment among core-age workers accounted for much of the headline increase in October. Among 25- to 54-year-olds, employment was 1.7% below its pre-COVID level. Employment among young Canadians was little changed and remained over 10% below the level observed in February.

Canada’s unemployment rate edged down to 8.9% in October, after peaking at 13.7% in May. The unemployment rate among core-age workers declined to 7.1%, while the rate among young Canadians edged down to 18.8%. In all, 1.8 million Canadians were unemployed in October, compared to 1.1 million in February.

After peaking at 5.5 million in April, the total number of Canadian workers directly affected by the COVID‑19 economic shutdown stood at 1.1 million in October. This includes net employment losses of 636,000 along with an increase of 433,000 in the number of Canadians who were employed but working less than half their usual hours.

On November 4th, the agency released September’s international merchandise trade report. After edging lower in August as trade flows stabilized, merchandise trade picked up in September as both exports and imports advanced. At $94.3 billion, merchandise trade in September was 4% below pre-COVID levels. Much of the decline in the total value of trade since February reflected decreases in energy products and aircraft and other transportation equipment.

Headline exports rose 1.5% in September, supported by a 23% increase in lumber exports which advanced for the fifth consecutive month. Rising lumber prices, bolstered by strong demand and lower supplies, brought lumber exports to their highest level in 14 years. Higher shipments of aircraft and passenger cars and light trucks also contributed to the increase in headline exports.

Despite these gains, overall exports in September were 5.8% below pre-COVID levels, reflecting a sharp decrease in energy exports and lower shipments to the United States. Exports to countries other than the U.S. were 1% above pre-pandemic levels.

Merchandise imports also rose 1.5% in September, led by a notable increase in crude oil shipments and higher imports of industrial machinery and equipment. Total merchandise imports in September were 2.3% below pre-pandemic levels, reflecting lower shipments from the United States.

While merchandise trade flows have largely rebounded to near pre-pandemic levels, Canada’s international trade in services remained well below levels observed in February, due to severe contractions in travel-related services. Receipts from travel services in September were 70% below pre-COVID levels, while payments for travel services were 90% below.

The latest edition of Canadian Economic News providing a concise summary of selected Canadian economic events, and international and financial market developments, is now available.

Weekly update - Friday, October 30, 2020

The economy continued to rebound in August from COVID-related shutdowns as real gross domestic product rose for the fourth consecutive month. Real GDP increased 1.2% in August, after advancing by 3.1% in July. Overall economic activity in August was about 5% below pre-COVID levels, as output increased in 15 out of 20 industrial sectors.

Higher output in the public sector, buoyed by increases in educational services, health care and social assistance, and public administration, contributed substantially to the headline gain. The increase in educational services reflected efforts by primary and secondary school teachers, support staff, and administrators to prepare for a return to school.

Higher output in manufacturing and construction also supported the headline increase. Output in construction increased to within 2% of pre-COVID levels, while manufacturing was about 4% below levels observed in February.

Accommodation and food services rose 7.3% as establishments continued to reopen and adjust to COVID-related protocols. Activity in this sector is still down 28% from levels observed in February.

The real estate sector continued to advance as home resale activity remained strong across the country. Activity at real estate agents and brokers in August was 32% above pre-COVID levels. Professional, scientific and technical services continued to increase steadily.

Lower output in mining and oil and gas extraction in August detracted from gains as oil sands production continued to decline. Output in the oil sands is down almost 20% from levels observed in February.

Statistics Canada also released advance estimates of real gross domestic product for September and the third quarter. Preliminary information points to an approximate 0.7% increase in September and an approximate 10% increase in the third quarter.

On October 29th, the agency released payroll employment data for August. The number of employees receiving pay or benefits from their employer rose by 303,200 in August, following gains of 759,500 in July and 665,500 in June. August’s headline increase brought total payroll employment to within 9.5% of pre-COVID levels, with net losses since February totaling 1.6 million.

The largest net declines in payroll employment since the onset of the pandemic were in accommodation and food services (-390,300), retail trade (-160,400) and arts, entertainment and recreation (-114,600). As of August, payroll employment in accommodation and food services was 29% below pre-COVID levels, while payrolls in arts, entertainment and recreation were down over 36%. Payroll employment in retail trade was 8% below levels observed in February.

Despite strong gains since late spring, overall declines in payroll employment since the onset of the pandemic remain concentrated among hourly paid workers. In August, the number of hourly paid workers receiving pay or benefits from their employer was down over one million from pre-COVID levels.

Earlier releases this week pointed to ongoing challenges in transportation. On October 27th, the agency reported that Canadian railways moved 29.0 million tonnes of freight in August, down 14.7% from August 2019, the largest of five consecutive year-over-year declines reported since March. The decline in August reflects a decrease in Canada’s exports of energy products. Moreover, at just over 3.0 million tonnes, intermodal freight loadings (containers) were down 5.8% from August of last year. The extent to which an August work stoppage at the Port of Montréal contributed to this decline is difficult to discern from the economic conditions spawned by the pandemic.

On October 29th, Statistics Canada released data on passenger transportation. While major Canadian airlines carried more than one million passengers in August for the first time since March, passenger volumes were down 86.8% on a year-over-year basis, the sixth consecutive month of severe declines. This capped a period with the sharpest and deepest drops in air passengers on record. On the ground, the country’s transit operators reported 56.1 million passenger trips in August, continuing a steady increase reported each month since April. However, when measured on a year-over-year basis, the number of passenger trips was down 59.8% from August of last year. Compared with February, payroll employment in transportation and warehousing was down 9.7% (-76,600), with the air and the transit and ground passenger subsectors reporting large declines.

On October 28th, the agency released data on business openings and closures for the July reference month. Openings outpaced closures for the first time since the pandemic began as the number of closures returned to pre-COVID levels.

After increasing sharply in June as restrictions continued to ease, business openings declined by 3.3% to 52,300 in July. At the same time, the number of closures fell by 34% to 36,500. Over 712,000 businesses were operating in business sector industries in July, down about 11% from levels observed in July of last year. Of the 17% of businesses that were operating in February that closed in March and April, one-half had reopened by July.

A new report that highlights changes in economic activity in the months following the lockdowns is available at: Recent Developments in the Canadian Economy, 2020: COVID‑19, fourth edition.

Weekly update - Friday, October 23, 2020

A strong demand for housing and building materials in the wake of the lockdowns was reflected in several of the headline indicators released this week.

The New Housing Price Index for September, released on October 21st, highlighted a surge in new home prices across the country, buoyed by strong demand and higher construction costs. New home prices rose 1.2%, the largest gain in 14 years, as builders surveyed in 24 out of 27 census metropolitan areas reported increases. September’s headline increase reflected higher prices for building materials along with a shift in buyer preferences for larger homes

The Consumer Price Index for September was also released on October 21st. Headline consumer inflation accelerated to 0.5% after holding steady at 0.1% during the summer months. The homeowners’ replacement cost index, which is related to the price of new homes, rose 2.6%, the largest year-over-year increase since April 2018. At the same time, prices for air transportation, which fell sharply on a year-over-year basis during July and August, declined at a more moderate pace in September, while prices for traveller accommodation remained down over one-quarter from levels observed in September of last year.

Overall, changes in goods prices, measured year-over-year, remained in negative territory in September for the seven consecutive month as lower prices for gasoline continued to weigh on the headline rate. Excluding gas prices, consumer inflation was 1.0%, up from 0.6% in August. Services price growth accelerated to 1.3% in September, after holding steady at 0.5% during the summer months.

Retail sales, released on October 21st, continued to edge higher in August, buoyed by strong sales at building materials and garden equipment and supplies dealers. Overall retail sales edged up 0.4% and were 1.8% above pre-COVID levels. Sales and building materials and garden equipment and supply stores rose by 4.5% and were 11% above levels reported in February. Higher sales of building materials and supplies also bolstered the sales of wholesalers in August, released on October 19th.

On October 22nd, the agency reported sales of food services and drinking places for August. Sales in this subsector rose 6.4% with receipts at full-service restaurants rising 10.4% as dining rooms and patios kept sales growing during the summer months. Sales at limited-service restaurants increased by 3.4% while those at drinking places rose 14.4%, as bars, pubs and some nightclubs continued to reopen. Despite this growth, unadjusted sales of food services and drinking places were down by over one-fifth (-22.1%) compared with August 2019. While the fall season may see additional recovery if patio weather continues and with more re-openings, there is some uncertainty as public health agencies begin to confront a second wave of COVID‑19.

Weekly update - Friday, October 16, 2020

On October 13th, Statistics Canada published Leading indicators of land border crossings for September and international arrivals to Canada by air for the third quarter. The number of American residents and returning Canadians crossing the border by automobile remained low in September with restrictions on non-essential travel still in effect. Compared to September 2019, there were over 94% fewer Americans entering Canada by automobile through land ports with electronic sensors while the number of Canadians returning from the United States by automobile via these same ports was down roughly 93%.

The third quarter includes the busy summer travel season which last year recorded over nine million air arrivals into Canada. Although Canadian airlines resumed some trans-border and international flights that had been cancelled earlier in the pandemic, 2020 was a rather subdued summer travel season. At Canadian airports equipped with Primary Inspection Kiosks, about 51,000 overseas residents and 19,900 US residents arrived by air from July to September. In the same three months, the number of Canadian residents returning from trips abroad by air was roughly 200,000, a fraction of the usual volume.

On October 16, the agency released the latest report from the Monthly Survey of Manufacturing. Following three months of strong growth in the wake of COVID-related shutdowns, factory sales fell by 2.0% in August, largely reflecting lower sales of transportation equipment. Sales at automakers and parts suppliers fell by double-digits after posting strong gains in July when several assembly plants skipped or shortened their annual shutdowns. In contrast, sales of wood products rose for the fourth consecutive month, supported by strong housing markets in Canada and the United States.

Excluding transportation equipment, manufacturing sales rose 1.1%. Total factory sales in August were 6.6% below pre-COVID levels.

Weekly update - Friday, October 9, 2020

Employment growth strengthened in September, bringing total employment to within 720,000 of its pre-COVID level. Employment rose by 378,000, mostly on full-time gains, led by increases in Ontario and Quebec. Higher employment in accommodation and food services, educational services, and manufacturing supported the headline increase.

Employment among core-age workers rose by 194,000 in September, with gains among women accounting for over two-thirds of the increase. Among 25 to 54 year-olds, employment was 2.3% below its pre-COVID level. Employment among young Canadians rose by 127,000, with gains split evenly between young men and young women. Despite these gains, employment among 15 to 24 year-olds remained over 10% below the level observed in February.

Canada’s unemployment rate declined to 9.0% in September, after peaking at 13.7% in May. The unemployment rate among core-age workers declined to 7.3%, while the rate among young Canadians fell to 18.9%. In all, 1.8 million people were unemployed in September, down from a peak of 2.6 million in May.

The total number of Canadian workers affected by the COVID‑19 economic shutdown stood at 1.3 million in September, after peaking at 5.5 million in April.

Labour underutilization occurs when people who could potentially work are not working, or when people could work more hours than they are currently. Labour underutilization reached a peak of 36.1% in April and has decreased steadily as the economy continues to reopen. In September, labour underutilization fell to 18.3%, but remained substantially higher than the pre-COVID level of 11.2% observed in February.

On October 6th, the agency released the international merchandise trade report for August. After rebounding sharply during June and July, trade activity stabilized in August as both exports and imports edged lower. At $92.3 billion, merchandise trade in August was about 6% below pre-COVID levels. Much of the overall decline in the value of trade since February reflects decreases in energy products and aircraft and other transportation equipment.

Following double-digit gains in June and July, exports fell by 1.0% in August, led by lower shipments of passenger cars and light trucks. This followed a sharp rise in automotive exports in July as carmakers ramped up production in the wake of COVID‑19-related shutdowns. At $7.5 billion, exports of motor vehicles and parts remained slightly above pre-COVID levels. Declines in other transportation equipment, reflecting lower shipments to Saudi Arabia, also weighed on headline exports.

Merchandise imports fell 1.2% in August after rebounding sharply in June and July. Lower imports of aircraft and other transportation equipment contributed substantially to the decline, along with lower shipments of metals and non-metallic minerals, and industrial machinery and equipment. Lower imports from the U.S. accounted for much of the overall decline.

Canada's international trade in services continued to edge higher in August as both service exports and imports advanced. Exports of commercial services increased by 1.0% to $6.5 billion, while imports of commercial services rose 1.8% to $6.4 billion. Canada’s total trade in services in August remained over one-quarter below pre-COVID levels.

On October 7th, Statistics Canada released investment in residential and non-residential building construction for August. Outlays on residential construction rose for the fourth consecutive month as spending on both single-unit and multi-unit dwellings advanced. Total outlays on residential buildings, at $10.8 billion, exceeded pre-COVID levels.

By contrast, investment in non-residential buildings fell for the second consecutive month in August as outlays on industrial, commercial and institutional buildings all declined. Despite these declines, total spending on non-residential building construction remained above levels reported in February.

On October 8th, the agency released new data that inform how observed changes in consumer spending patterns since February have affected estimates of consumer price inflation. The new data are based on an adjusted price index that takes these sudden changes in consumer spending into account, which is then compared to the official Consumer Price Index.

This adjusted measure yields slightly higher estimates of consumer inflation since the onset of the pandemic. While the gap between the adjusted index and the official CPI narrowed in June, the adjusted measure remained higher than the official CPI in July and August. During these two months, the adjusted price index rose 0.4% on a year-over-year basis, while the official CPI rose 0.1%.

Weekly update - Friday, October 2, 2020

Economic output continued to rebound in July, supported by higher factory production, increased activity in accommodation and food services, and a sharp increase in activities related to the housing market.

Real gross domestic product rose 3.0% in July as all 20 major industrial sectors advanced. While output has strengthened for three consecutive months as reopening efforts continue to advance across the country, overall economic activity in July remained about 6% below pre-COVID levels.

Higher output in the manufacturing sector was a major contributor to July’s headline gain, as automakers continued to ramp up production in response to strong consumer demand. Total manufacturing output in July was about 6% below levels in February.

Accommodation and food services rose by 20.1% as businesses continued to reopen and adjust to COVID-related restrictions. Despite three consecutive months of double-digit gains, overall activity in this sector remained about one-third below pre-COVID levels.

The activities of real estate agents and brokers rose markedly for the third consecutive month as home resale activity continued to strengthen in major urban markets. Activities of real estate agents and brokers in July were over 20% above pre-COVID levels. An increase in legal services related to real-estate transactions also supported stronger housing market activity.

Statistics Canada released an advance estimate of real gross domestic product for August, Preliminary information for August points to a 1% month-over-month increase in real gross domestic product.

Several releases on September 30th showed that transportation activity continued to recover during July. Although the volume of rail freight decreased slightly from June, it was annual declines in the tonnages of fuel oils, crude petroleum and coal products that offset healthy year-over-year increases in agricultural products, such as wheat and canola, as well as in motor vehicle parts and other transportation equipment.

During the usually busy travel season in July, major Canadian airlines carried almost twice as many passengers than in June, but passenger volumes remained down almost 90% from July 2019. While public transit reported a third consecutive monthly increase in passengers during July, ridership only reached about one-third of the total from the previous July.

On September 28th, the agency released data on business openings and closures for June. The number of businesses that closed in June was 56,300, down slightly from 59,600 in May. Monthly closures had peaked at 89,100 in April during the COVID‑19 lockdowns. The number of business openings rose to 52,700 in June as COVID‑19 restrictions eased across the country.

The June report also presented new information on the number of businesses that shut down and subsequently reopened. In total, just over 17% of businesses that were active in February closed during March or April. Of those businesses that closed, only about 19% had reopened by June.

Weekly update - Friday, October 2, 2020

On September 24th, Statistics Canada released data on payroll employment for July. These data provide labour market information on workers that received pay or benefits from their employer, excluding those who are self-employed, owners and partners of unincorporated businesses and professional practices, or employed in the agricultural sector.

Payroll employment continues to recover as reopening efforts advance across the country. Payroll employment rose by 740,000 in July, after increasing by 666,000 in June. Almost three-quarters of July’s gain reflected higher employment among hourly paid workers, who were much more severely impacted by the lockdowns in the spring. Since February, hourly paid workers have accounted for two-thirds of payroll job losses. Payroll employment among hourly paid workers in July was 1.3 million below pre-COVID levels, while total payroll employment was 1.9 million below the level observed in February.

The payroll estimates reported above are based on employees who received pay or benefits; accordingly, they do not include workers who continue to have an attachment to a job but who are not being paid by their employer. The number of these workers has risen substantially since the onset of the pandemic. According to July’s Labour Force Survey, the number of employed workers who were absent from work for more than four weeks and that did not receive pay or benefits was 389,000 higher than pre-COVID levels in February.

Earlier in the week, two Statistics Canada releases pointed to ongoing challenges facing the tourism sector during the pandemic. Travel between Canada and other countries, released September 23rd, confirmed that international travel to and from Canada remained at extremely low levels throughout July with travel restrictions implemented in March still in effect. In July, the number of Canadian residents returning from the United States or from overseas was about 95% lower than levels observed in July of 2019. Travel to Canada from both the United States and overseas countries was down roughly 97% over the same one-year period. This severe decline has left many businesses in accommodations and food services as well as in arts and cultural industries struggling during what is usually peak tourist season. While sales at food services and drinking places (also released on September 23rd) did increase for the third consecutive month in July, sales remained over 25% below pre-COVID levels.

As dining rooms and patios continued to re-open in early summer, sales at full-service restaurants increased by more than one-third in July (+36.2%) compared with June. Likewise, with many bars, pubs and some nightclubs re-opening in July, sales reported by drinking places also rose substantially (+40.8%). However, when compared with July 2019, unadjusted sales across the entire sector were down by one-quarter (-24.5%) with sales in tourism-dependent Prince Edward Island down more than one third (-34.6%).

With the colder fall weather approaching, the challenges faced by many of these businesses are expected to continue. With recent concerns over a second wave of infections, Canada announced on September 18th that its southern border will remain closed to non-essential travel, including tourism, until at least October 21st.

Weekly update - Friday, September 18, 2020

After recovering to pre-COVID levels in June, retail sales edged higher in July, led by sales at auto dealers. Total retail sales increased 0.6% to $52.9 billion, as strong consumer outlays during the reopening phase have supported a V-shaped recovery in the sector.

Sales at motor vehicle and parts dealers in July reached $14.0 billion, building on a strong rebound in May and June after sales fell to $5.1 billion during the shutdowns in April. Sales at auto and parts dealers in July were about 1% below February levels.

Receipts at gasoline stations also rose in July as COVID‑19-related restrictions continued to ease and travel volumes increased. Sales at clothing and clothing accessories stores increased as more regions allowed malls to reopen.

Retail e-commerce sales, measured on an unadjusted basis, edged down to $2.8 billion in July, accounting for 4.8% of total retail trade. The share of retail e-commerce sales to total retail sales had declined as restrictions on storefront activity have eased. On a year-over-year basis, e-commerce sales have increased 63.2% while total unadjusted retail sales have risen 5.6%.

Approximately 3% of retailers reported being closed in July, on average, for one business day. Statistics Canada also released an advance estimate of total retail sales in August, which point to a month-over-month increase of approximately 1.1%.

Wholesaling activity also continued to strengthen in July as sales advanced for the third consecutive month. Wholesale sales rose 4.3% to a record $65 billion, led by higher sales of motor vehicles and motor vehicle parts as production ramped up in response to pent-up demand. Excluding auto-related sales, wholesale sales increased by 1.8%. Total wholesale sales in July were 0.6% higher than pre-COVID‑19 levels.

Factory sales continued to rebound from COVID‑19-related shutdowns, advancing in July for the third consecutive month. Total manufacturing sales rose by 7.0% as factories continued to ramp up production. Led by higher sales in Ontario and British Columbia, July’s headline gain followed a record 23% increase in June as activity strengthened across the sector. Nevertheless, total factory sales in July remained just over 5% below pre-COVID levels.

Higher sales among motor vehicle and parts producers accounted for almost two-thirds of the headline increase, as many automakers shortened or skipped their summer shutdowns. Sales of motor vehicles and parts in July were 10% above February’s level. Higher sales of petroleum and coal products also contributed to the overall gain as prices and volumes advanced. However, sales of these products were about one-third below pre-COVID levels.

Consumer price inflation remained subdued in August as lower gasoline prices and lower prices for air transportation continued to weigh on the headline rate. The all-items consumer price index, measured year-over-year, edged up 0.1% in August, matching the increase in July. Headline inflation has averaged 0.2% since COVID‑19 began impacting the Canadian economy in March.

Gasoline prices, measured year-over-year, declined for the sixth consecutive month in August. Excluding gas prices, consumer price inflation slowed to 0.6%, down from 0.7% in July. Prices for air transportation, down 16.0% on a year-over-year basis, fell for the second consecutive month as airlines continued to offer discounts to encourage a return to travel. Prices for traveller accommodation fell 25.4%, the fourth consecutive month of steep declines.

Weekly update - Friday, September 11, 2020

On September 9, Statistics Canada reported over 43,000 itinerant aircraft movements (take-offs and landings) at major Canadian airports with NAV CANADA control towers for the week ending August 28. After border closures and public health restrictions took effect in March, total movements fell to a low of just over 14,100 (unadjusted) during the week ending April 18. Total movements have steadily increased since, driven mainly by domestic flights, albeit with fewer passengers, and by more dedicated cargo traffic resulting from the surge in e-commerce sales. However, this year’s summer travel season was anything but busy. Domestic aircraft movements for the 12 week period ending August 28 were at 87% of the total for the 12 week period before the March restrictions, while trans-border (Canada - U.S.) and overseas movements both remain more than one-fifth below their pre-pandemic level.

August marked the fifth consecutive full month of restrictions on non-essential travel across the Canada-US border. And cross border travel remained low according to Statistics Canada’s Leading indicator of cross-border traveller volume, released on September 11th. In August at the 111 land ports equipped with electronic sensors, automobile arrivals to Canada by US residents were more than 95% lower than August of 2019. Similarly, the number of Canadian residents returning from the United States by automobile through these same land ports was more than 95% below last year. Canada and the United States temporarily restricted non-essential travel across the land border in the second half of March and these restrictions will remain in effect at least until September 21, 2020.

According to the September 10th Commercial rents services price index report, average commercial rents fell nationally by just over 3% during the second quarter of 2020. The drop was similar for all building types - offices, retail and industrial buildings and warehouses. Average rents were down across the country, with declines more acute in some Census Metropolitan Areas (CMA). For example, average rental rates for retail buildings fell by over 13% in Calgary and for offices by about 11% in Montréal. Office rents remained more or less the same in the Toronto CMA but rents for industrial building and warehouses were down by almost 6%. While the extent to which COVID‑19 was directly associated with these declines is not known, the long-term outlook of the commercial real estate market remains uncertain with many employees working from home and the recent shift in retail to online sales.

On September 11th, the agency released the national balance sheet accounts for the second quarter. The data underscore the extraordinary impacts that COVID‑19 has had on financial conditions in the household sector. After a record decline in the first quarter, the net worth of households rose 5.0% to $11.96 trillion in the second, supported by gains in equity markets and in the value of residential real estate. Residential resale sales volumes strengthened markedly in June after grinding to a crawl in April and May due to COVID‑19 related restrictions.

Households sharply decreased their borrowing in the second quarter. Total credit market borrowing fell to $0.9 billion, down from $26.0 billion in the first. The decline was a result of a sharp decrease in non-mortgage and consumer credit borrowing, as households reduced their principal balance at a much faster pace than they added new debt as household spending contracted sharply.

Household credit market debt as a proportion of household disposable income fell to 158.2% in the second quarter, down from 175.4% in the first, as disposable income rose sharply while the stock of credit market debt remained relatively unchanged. The household debt service ratio dropped from 14.54% to 12.40%, the largest decline on record.

Weekly update - Friday, September 4, 2020

After increasing by 419,000 in July, employment rose by 246,000 in August, led by gains in full-time work. Overall employment gains since the economic shutdown in April have totaled 1.9 million. Despite these gains, employment in August remained about 1.1 million below pre-COVID levels.

Higher employment among core-age workers accounted for over one-half of the overall increase in August, as employment among 25 to 54 year-olds rose to over 96% of pre-COVID levels. The recovery in core-age employment has been stronger among men. Employment among young Canadians increased by 55,000 in August, after rising by 400,000 during June and July. Despite these gains, employment among 15 to 24 year-olds in August remained over 15% below pre-COVID levels.

Canada’s unemployment rate declined to 10.2% in August, after reaching a record high of 13.7% in May. Among core-age workers, the unemployment rate stood at 7.8%, while the rate among youth was 23.1%.

The number of job searchers increased for the six consecutive month in August, while the number of people wanting a job but not searching held steady. If people not searching for work were included as unemployed, the adjusted unemployment rate would be 13.0%.

Labour underutilization occurs when people who could potentially work are not working, or when people could work more hours than they are currently. Labour underutilization reached a peak of 36.1% in April and has decreased substantially as the economy reopens. In August, labour underutilization fell to 20.3%, but remained almost twice as high as pre-COVID levels.

On September 3rd, the agency released the international merchandise trade report for July. Following a strong rebound in June, merchandise trade continued to strengthen in July, bolstered by higher shipments of motor vehicles and parts and energy products. Almost 90% of July’s increase in trade activity reflected higher trade flows with the United States. Overall trade activity in July was 5% below pre-COVID levels.

Following a 20.5% increase in June, exports rose by 11.1% in July on broad-based gains across commodities. Higher exports of motor vehicles and parts accounted for about one-half of the overall increase as auto producers responded to COVID‑19-related closures by ramping up production and undergoing shorter seasonal shutdowns. At $8.2 billion, exports of motor vehicles and parts were nearly 12% above February levels. Exports of energy products, which strengthened for the third consecutive month, also contributed to July’s gain.

After rising 20.3% in June, merchandise imports rose by 12.7% in July as shipments of most major commodities increased. Higher imports of motor vehicles and parts accounted for about one-half of the overall gain. Despite substantial increases in June and July, imports of autos and auto parts remained about 11% below levels observed in February. July’s headline increase was also supported by higher imports of cellphones, which reflected the reopening of retail activity and the availability of new models.

Canada's international trade in services also increased in July as both exports and imports advanced. Exports of transportation services rose 9.3% to $1.1 billion as COVID‑19 related restrictions on businesses in Canada continued to ease. Imports of transportation services rose by 5.3% to $1.7 billion. Canada’s total trade in services in July was about 29% below pre-COVID levels.

On September 2nd, the agency released data on labour productivity for the second quarter. Following a 4.5% increase in the first quarter, business sector labour productivity rose by a record 9.8% in the second as hours worked fell at a much faster pace than business output. Hours worked in the business sector was down 22.1% in the second quarter, while the real gross domestic product of businesses fell 14.5%.

Weekly update - Friday, August 28, 2020

The GDP report for the second quarter underscored the severe, broad-based impacts of the COVID‑19 pandemic on Canadian economic activity. Following the 2.1% decline in the first quarter, real gross domestic product fell by 11.5% in the second, reflecting record declines in household spending and non-residential business investment, as well as steep contractions in cross-border trade.

Sharp declines in household spending were broad-based as consumers faced non-essential businesses closures and heightened levels of income uncertainty. Purchases of new passenger cars fell by over one-third, while spending on new trucks, vans and SUVs was down by about one-quarter. Household spending on services was down by almost 17%, reflecting sharp declines in food and accommodation services and transportation.

Business investment contracted sharply as firms faced increased levels of economic uncertainty. Outlays on non-residential structures and machinery and equipment were down by almost 20% while spending on intellectual property fell by nearly 8%. Investment in housing also declined substantially.

Export and import volumes were down by about 18 % and 23% respectively, as business closures in Canada and abroad weighed severely on trade activity.

The pandemic substantially impacted household earnings. Measured in nominal terms, employee compensation fell by about 9% in the second quarter. However, these declines in employment income were offset by large increases in government transfers, resulting in nearly an 11% increase in household disposable income. Coupled with the sharp pull-back in household spending, these income gains pushed the household savings rate to just over 28%, up from about 8% in the first quarter.

While the second-quarter GDP report illustrated the severe impacts of COVID‑19 on different aspects of the economy, June’s monthly GDP report highlighted the gradual strengthening of economic activity as efforts to reopen the economy continued. Real gross domestic product rose 6.5% in June, following a 4.8% increase in May. Economic activity in June remained 9% below pre-pandemic levels in February. Manufacturing output continued to strengthen in June, and was 12% below pre-pandemic levels. Activity in accommodation and food services also strengthened notably in June, but remained 45% below pre-pandemic levels. Output in retail trade industries in June exceeded pre-pandemic levels.

Statistics Canada also released an advance estimate of real gross domestic product in July. Preliminary information for July points to a 3% increase in real GDP.

On August 25, Statistics Canada released data on food services and drinking places. In June, sales by these establishments rose 26.8% (seasonally adjusted) to $3.9 billion from May, the second consecutive monthly increase. With many businesses reopened under new rules and restrictions by June, higher sales were reported in all industry groups across the country. Unlike May when growth in sales at limited-service eating places outpaced those at full-service restaurants, June’s larger increase was for full-service restaurants (+58.3%) rather than limited-service eating places (+12.8%). When data for June 2020 are compared with June 2019 however, unadjusted sales were down by over one-third (-37.1%).

Also this week, the agency released data on railways and on aviation. Despite the economic reopening, Canadian railways carried 29.8 million tonnes of freight in June, down 10.4% from June of 2019 and the third consecutive month of double-digit decline. While June’s Canadian international merchandise trade reported growing exports, the rail decline was driven by weak demand for some key commodities. Loadings of oil and crude petroleum (-69.4%) and of coal (-11.9%) both fell from June 2019, reflecting weak global energy demand. Even with the onset of the summer driving and vacation season, border closures and travel restrictions lowered demand for gasoline and aviation fuel as loadings fell (-55.3%).

In June, Canada’s largest airlines used just 103.3 million litres of turbo fuel (down 85.3% year-over-year) to fly 440,000 scheduled and charter passengers (down 93.9% year-over-year). This fourth consecutive decline in passengers marks the steepest and deepest drop on record. Some signs of recovery at major Canadian airports appeared in June. Domestic itinerant movements (take-offs and landings) increased from May but remained almost 50% below those reported in June of 2019 while both trans-border (between Canada and the U.S.) and other international traffic remained about 90% lower. It appears that there is much uncertainty as to when commercial air traffic will begin to fully recover.

Weekly update - Friday, August 21, 2020

After rebounding by 21.2% in May, retail sales rose by an additional 23.7% in June as reopening efforts continued across the country. At $53.0 billion, total sales in June surpassed pre-pandemic levels by 1.3% as all store types reported gains. Retail sales surpassed pre-pandemic levels in all provinces except Ontario and British Columbia.

Higher sales at motor vehicle and parts dealers accounted for almost one-half of the growth in June as spending strengthened to near-February levels. Sales at clothing and clothing accessories stores more than doubled in June as brick-and mortar stores continued to open, including those in malls. Spending at these stores remained about 20% below levels in February.

Retail e-commerce sales, measured on an unadjusted basis, were $3.2 billion in June, accounting for 5.4% of total retail trade. E-commerce sales in June made up a smaller share of retail sales than in April and May, as more non-essential retailers opened their brick-and-mortar stores.

Statistics Canada also released an advance estimate of total retail sales in July, which point to a month-over-month increase of approximately 0.7%.

Wholesaling activity strengthened markedly in June as widespread gains across subsectors pushed sales to near pre-pandemic levels. Wholesale sales rose 18.5% to $62.1 billion, about 4% below the level observed in February. June’s increase was led by higher sales of motor vehicles and parts, which more than doubled to $8.9 billion. Despite the sharp increase, sales at auto and auto parts wholesalers remained almost one-quarter below pre-pandemic levels. Higher sales of personal and household goods, building materials and supplies, and machinery and equipment also contributed to June’s headline increase.

Consumer price inflation moderated in July as lower gasoline prices and lower prices for air transportation and traveller accommodation weighed on the headline rate. The all-items consumer price index, measured year-over-year, rose 0.1% in July, after advancing 0.7% in June. The headline rate had fallen into negative territory during April and May as COVID‑19-related restrictions led to severe declines in economic activity.

Gasoline prices, measured year-over-year, declined for the fifth consecutive month in July. Excluding gas prices, consumer price inflation slowed to 0.7%. Prices for air transportation fell for the first time on a year-over-year basis (-8.6%) since December 2015. While many flights remained cancelled or suspended as a result of the COVID‑19 pandemic, airlines were offering various incentives such as reduced fees, discounts and promotions to encourage a return to travel. Prices for traveller accommodation declined 27.0% year-over-year, posting record declines for the third consecutive month.

A new study released by Statistics Canada evaluated the extent to which small, medium and large businesses were affected differently by COVID‑19 restrictions during the early stages of the pandemic. The report highlights relatively large declines in economic activity among smaller firms, particularly in service industries. The study "Economic Impact of the COVID‑19 Pandemic on Canadian Businesses across Firm Size Classes” was released on August 19th.

Weekly update - Friday, August 14, 2020

Factory sales strengthened markedly in June as plants continued to increase their operating capacity. Total manufacturing sales rose by 20.7% as all 21 manufacturing industries reported gains. Led by higher sales in Ontario and Quebec, June’s record increase followed an 11.6% gain in May as manufacturing activity continued to recover from COVID‑19 related shutdowns. Nevertheless, total factory sales in June remained about 13% below pre-pandemic levels in February.

Sales in the transportation equipment industry more than doubled in June, led by higher sales of motor vehicles and parts as most plants returned to full production following COVID‑19 related shutdowns earlier in the spring. Over one-half of June’s headline increase reflected higher sales of motor vehicles and parts. Higher sales of petroleum and coal products also contributed to the record gain, as refineries ramped up production in response to higher fuel demand as provincial economies continued to reopen.

On August 11th, the agency released revised capital intentions data for 2020. Based on survey information collected in June and July, these new estimates underscore the extent to which COVID‑19 has weighed on the capital plans of businesses in most industrial sectors.

Prior to COVID‑19, private-sector organizations anticipated spending 0.9% more in 2020 on non-residential construction and machinery and equipment (M&E); the new, revised intentions for 2020 point to a 16.6% decrease in private-sector outlays, reflecting sharply lower intentions among oil and gas producers, manufacturers, and accommodation and food service companies. By contrast, public-sector organizations anticipate spending 4.2% more on non-residential construction and M&E. Overall, combined spending by private and public organizations is now expected to be 9.5% below levels in 2019, with steep declines in Newfoundland and Labrador, Alberta and Saskatchewan.

Annual capital outlays in oil and gas extraction are expected to decline by 31.7% as many energy companies have substantially revised their capital plans in recent months. At $21.7 billion, anticipated spending among oil and gas producers is down over two-thirds from levels reached in 2014 before energy companies reduced their investment spending during the oil shock.

Manufacturers now anticipate their annual capital outlays to fall by 18.5% in 2020, led by sizable declines among chemical producers and makers of transportation equipment. Annual capital spending in the accommodation and foods service sector is expected to fall by almost 40%.

The leading indicator of cross-border traveller volume for July was also released on August 11th. July marked the fourth consecutive full month of restrictions on non-essential travel across the Canada-U.S. border and crossings by automobile remained flat. The usual spikes associated with Canada Day and the Fourth of July did not occur. U.S. residents took just 70,500 trips to Canada through 111 land ports equipped with automated Integrated Primary Inspection Lines (IPIL), down 97% from the same month last year. And Canadian residents made 144,500 return trips from the United States through these same ports, down 95% from last July. Since the 30-day restriction on non-essential travel across the border was imposed on March 21st, it has been extended on four occasions. The most recent of these, on July 16th, extended the border closure until August 21st. As such, land crossings will remain more or less flat well into August.

Weekly update - Friday, August 7, 2020

After increasing by nearly one million in June, employment rose by 419,000 in July as businesses and workplaces affected by COVID‑19-related restrictions continued to reopen. Gains in July were concentrated in part-time work and among women, with almost one-half of the net increase reflecting higher employment in wholesale and retail trade, and accommodation and food services. After advancing steadily from May to July, overall employment remains 1.3 million below pre-COVID levels, reflecting large cumulative losses in accommodation and food services, wholesale and retail trade, construction, transportation and warehousing, and manufacturing.

The employment rate, the portion of the working-age population that is employed, rose to 57.3% in July, 4.5 percentage points below its pre-COVID level. The employment rate among young Canadians, at 47.9%, is about 10 percentage points below its pre-COVID level.

The unemployment rate fell to 10.9% in July, after reaching a record high of 13.7% in May. Despite this decrease, almost 2.2 million Canadians were unemployed, nearly twice as many as in February. The number of people who wanted a job but did not search for work, likely for reasons related to COVID‑19, continued to fall in July. If these people were included as unemployed, the adjusted unemployment rate would be 13.8%.

On August 5th, the agency released the international merchandise trade report for June. Trade activity rose sharply, bolstered by higher auto shipments as Canada-U.S. trade flows rebounded. The total value of merchandise trade, at $82.6 billion, was 20% higher than in April when business closures, notably in the auto sector, severely hampered Canada-U.S. trade flows. Overall trade activity in June, however, remained 16% below levels observed in February, before the economic impacts of the pandemic took hold.

Following a 5.6% gain in May, merchandise exports rose 17.1% in June, led by higher shipments of motor vehicles and parts. Production at Canadian assembly plants continued throughout June after activity resumed in mid-May. Auto-related shipments rose sharply to $6.1 billion, and accounted for almost three-quarters of the overall increase in merchandise exports. Excluding motor vehicles and parts, exports rose 5.1%, supported by an increase in metal and non-metallic mineral products. Overall, 85% of the growth in merchandise exports in June reflected higher shipments to the United States.

After declining by 4.6% in May as COVID‑19 continued to disrupt supply chains, merchandise imports rebounded sharply in June, advancing 21.8% on widespread gains across commodities. Higher imports of motor vehicles and parts accounted for almost one-half of the overall increase, as auto-related shipments climbed to $5.2 billion after falling to $1.7 billion in May. Excluding motor vehicles and parts, merchandise imports rose by 12.2%, supported by an increase in aircraft and other transportation equipment.

Canada's international trade in services also began to show signs of recovery in June following declines due to business closures and travel restrictions related to COVID‑19. Imports of services rose 17.0% to $8.8 billion, largely reflecting higher payments for travel services. Despite the gain, payments to non-residents for travel services were roughly one-quarter of that observed in February. At the same time, exports of services in June rose 4.1% to $8.1 billion, supported by higher receipts for commercial services, but remained 14% below February levels.

On August 5th, the agency also released a new experimental series on business openings and closures that highlighted the extent to which the COVID‑19 pandemic has led to a substantial increase in business closures along with a decline in business openings. Closures in April 2020 were more than twice the level observed in April 2019, while openings fell by almost one-quarter over this period.

Weekly update - Friday, July 31, 2020

Most industrial sectors reported stronger economic activity in May as COVID‑19-related restrictions began to ease across the country. After contracting by over 18% from February to April, real gross domestic product rose 4.5% in May as 17 out of 20 industrial sectors advanced. Higher output in the goods sector, led by sharp increases in construction and manufacturing, accounted for 44% of the overall growth in May, while stronger activity in service industries, including retail, wholesale and educational services, accounted for 56% of the economy-wide gain.

Following the severe decline in April, construction rose 17.6% in May as restrictions on activity eased in Ontario and Quebec. Both residential and non-residential activity rebounded sharply. Despite these gains, the overall output of construction industries in May was about 14% below levels in February.

The manufacturing sector rose 7.4% in May, supported by higher activity among transportation equipment manufacturers as production in the auto sector resumed. Increases in petroleum and coal products also supported growth as refineries ramped up production. Manufacturing output in May remained about 24% below levels in February.

Retail trade rose 16.6% in May, led by higher activity at motor vehicle and parts dealers. Overall retail output in May was down almost 17% from levels in February.

Statistics Canada also released an advance estimate of real gross domestic product for reference month June. Preliminary information for June indicates an approximate 5% increase in real GDP. This flash estimate for June points to an approximate 12% decline in real GDP in the second quarter of 2020.

With the partial opening up of the economy in many provinces during May, there was an expected upturn in the movement of both goods and people. New data on railway carloadings released on July 29th showed that Canadian railways carried 30.1 million tonnes of freight in May; roughly the same as April but a drop of 13.3% from May of 2019. This was driven largely by year-over-year declines in the loadings of Fuel oil and crude petroleum (down 63.3%), despite a partial rebound in crude oil prices, and in Gasoline and aviation turbine fuel (down 71.8%), as some travel restrictions remained. Also, loadings of Coal (-8.8%) and of Iron-ore and concentrates (-6.0%) fell with continued shut-downs of some mines.

From July 30th releases on the passenger side, total aircraft movements (take-offs and landings) at Canada’s major airports in May were 63.3% lower than the same month in 2019. However, this was still an increase of almost 38,000 itinerant movements (from one airport to another) from April, comprised mainly of domestic flights with fewer passengers. Indeed, the major Canadian airlines carried only 224,000 passengers on scheduled and charter services in May, down 96.7% from May 2019, the third consecutive year-over-year monthly decline. Fewer passengers in May helped to push operating revenues down 89.2% from a year earlier. Finally on the ground, Canadians made 26.2 million urban transit trips in May, up 12% from the April low but still over 80% fewer trips then taken during last May.

Weekly update - Friday, July 24, 2020

After declines in April and May, consumer price inflation rose into positive territory in June as upward pressure on energy prices supported the increase in the headline rate. Consumer prices, measured year-over-year, rose by 0.7% in June, after declining 0.4% in May. Gasoline prices declined less on a year-over-year basis in June than in May as businesses impacted by COVID‑19-related restrictions continued to gradually reopen, which, coupled with an increase in local travel, bolstered demand.

Excluding gasoline prices, consumer price inflation accelerated to 1.2% in June, as prices for durable and semi-durable goods, such as passenger vehicles, clothing and footwear, contributed to the increase.

More information about the impact of COVID‑19 on the consumer price index is available in the report Consumer expenditures during COVID‑19: An exploratory analysis of the effects of changing consumption patterns on consumer price indexes, released by Statistics Canada on July 13th.

Following April’s historic decline, retail sales in May rose by 19% to $41.8 billion as COVID‑19-related restrictions eased in several provinces. About one half of the growth in May reflected higher sales at motor vehicle and parts dealers, which increased by $3.4 billion after low consumer demand contributed to severe declines in March and April. Sales at auto and parts dealers in May remained 40% below levels in February. Higher receipts at general merchandise stores also contributed to stronger retail sales in May. Receipts at merchandise stores rose by $1.1 billion, offsetting the decline in April, and were 5% above levels in February

Higher retail sales in Quebec led the rebound in May as many retailers began to reopen early in the month. Total retail sales for Canada as a whole in May remained 20% below levels observed in February, as almost one quarter of retailers reported being closed, on average, for five business days.

E-commerce sales by Canadian retailers, unadjusted for seasonality, increased to $3.8 billion in May, after rising dramatically in April as many retailers started or expanded their on-line platforms. On-line sales in May were more than double the level observed in May of 2019.

Statistics Canada also released an advance estimate of total retail sales in June, which point to a month-over-month increase of approximately 25%.

Businesses in the food service industry were among those most heavily impacted by COVID‑19. On July 22nd, the agency released May sales data for food services and drinking places. After falling from $6.3 billion in February to $2.3 billion in April, receipts at food services establishments and drinking place rose by 35% in May to $3.1 billion. Monthly sales in Quebec, British Columbia and New Brunswick rose by over 40%.

Also on July 22nd, the agency released data on travel between Canada and other countries which remained low throughout May, the second full month that travel restrictions were in effect. Arrivals from overseas countries (those other than the U.S.) to Canada dropped by 97.9% compared with May 2019, while arrivals from the United States were down 96.6%. The number of air arrivals to Canada from the United States in May was the lowest number of trips since modern record keeping began in 1972.

Weekly update - Friday, July 17, 2020

Factory sales strengthened in May as manufacturing activity ramped up after plants had scaled back or shuttered operations in April due to COVID‑19. Total manufacturing sales in May rose 10.7% to $40.2 billion. While manufacturers in many industries reported gains, higher sales among motor vehicle assembly plants and parts suppliers accounted for nearly 40% of the overall increase. Higher sales among refineries and fabricated metal producers also contributed to gains in May, while machinery sales declined as producers reported lower demand due to the pandemic.

May’s double-digit increase in manufacturing sales followed April’s record 27.9% decline. Four out of five manufacturing establishments reported that their activities in May were affected by COVID‑19, while one-quarter of establishments reported that they have a recovery plan in place. Overall factory sales in May remained almost 30% below levels in February.

New motor vehicle sales in May also recovered slightly from the historic declines reported in April. Measured on a year-over-year basis, new motor vehicle sales were down 47% in May, after falling 75% in April. Dealer showrooms began to reopen in May with physical distancing measures in place.

On July 13th, an agency study pointed to signs of economic recovery in transportation. With border closures and travel restrictions, itinerant aircraft movements (take-offs and landings) declined to just over 14,100 during the week of April 11th. Since reaching this low, movements have steadily increased to the end of June, driven by domestic flights, albeit with fewer passengers, as well as by more dedicated, but less lucrative air cargo, reflecting a surge in e-commerce sales. On the freight side, the amplitude was less severe as goods movement remained an essential service. System-wide, the number of railcars online reached a low of 126,400 during the week of May 9th. By mid-month, some non-essential businesses, including automobile manufacturers and parts suppliers, gradually resumed production. This resulted in the use of relatively more box cars and multilevel automotive cars in June by Canada’s mainline railways.

On July 14th, leading indicators were released on international arrivals by air and on cross-border travel volumes. At airports equipped with electronic kiosks for customs clearance, the number of international arrivals to Canada by air began to decline sharply following border restrictions in mid-March and then remained flat from April through to the end of June. On the ground, 64,200 US residents entered Canada in June through 111 land ports equipped with automated scanning devices, down 96% from 1.6 million in June of 2019. There were 136,400 Canadian residents who returned to Canada through these same ports—94% fewer than the 2.1 million recorded last June. Agreement to restrict the Canada-US border to essential travel is likely to be extended into late August.

Also on July 14th, Statistics Canada released new data from the Canadian Survey on Business Conditions for reference month May that highlighted how restrictions on social and economy activity have affected businesses as the economy begins to reopen. Nearly two-thirds of businesses expect the size of their workforce to remain the same over the next three months, while nearly one-third of businesses reported that at least 10% of their workforce was teleworking or working remotely at the end of May. The survey also provided information on the financial health of businesses. Eight percent of businesses reported that they would only be able operate at current revenue and expenditure levels for less than three months, before having to consider additional staffing actions, closure or bankruptcy. Among newer businesses, those that are two-years old or less, this figure rose to 14%.

The survey also found that nearly one-quarter of businesses that make rent or mortgage payments had their rent or mortgage payments deferred, while about 6% of businesses had their request to defer payments rejected. Three out of five businesses that make rent or mortgage payments had not asked or been offered the option to defer payments owed.

Weekly update - Friday, July 10, 2020

Today the agency released a key economic barometer for June – the Labour Force Survey – covering the first full month when public health restrictions had been eased in most parts of the country, including the partial re-opening of businesses and workplaces. After falling by more than 3 million from February to April, employment rose by 290,000 in May. Despite this first sign of a labour market recovery, Canada’s unemployment rate in May rose to an historic 13.7% as more people began looking for work.

In June, employment increased by a further 953,000, pushing the unemployment rate down to 12.3% as the decline in the number of people on temporary layoff more than offset an increase in the number of job seekers. The employment gain was split almost evenly between full-time work (+488,000) and part-time work (+465,000). However, despite this broad based gain, total employment still remained 1.8 million (-9.2%) below the February level.

Employment rose slightly faster among women (+6.1% or +467,000) than men (+5.5% or +487,000). On a cumulative basis however, employment among men had recovered to 92.3% of its February level, compared with 89.2% among women. And in each of the three major age groups—youth aged 15-24, core-aged workers aged 25-54 and those aged 55 and older—recovery of COVID‑19-related employment losses was more advanced among men than among women.

By the LFS reference week of June 14 to June 20, all provinces had substantially eased COVID‑19 restrictions and, as such, recorded an increase in employment and a decrease in COVID-related absences. Employment rose by 378,000 in Ontario while Quebec recorded gains of 248,000. Employment in British Columbia rose by 118,000. Again, despite increases across the board, employment in all provinces in June remained below pre-pandemic levels in February.

While employment grew in most industries in June, there was little change in industries where a high proportion of workers were able to work from home, such as professional, scientific and technical services. Conversely, retail trade and accommodation and food services, where jobs often involve close physical proximity with others, recorded large employment gains of 184,000 and 164,000 respectively. However, accommodation and food services still remains furthest below pre-pandemic levels.

On July 8, the agency released the National Travel Survey and the Visitor Travel Survey for the fourth quarter of 2019. Although the looming pandemic was not yet a consideration in the travel decisions of Canadians in the final months of 2019, trips by Canadians were down 1.5% year-over-year from October through December 2019. International travellers made more trips to Canada over the same period, up 2.8% from the same quarter of 2018. These releases complete 2019 and will serve as a benchmark to measure the impact of COVID‑19 on tourism and travel behaviour during 2020.

Weekly update - Friday, July 3, 2020

April’s GDP report, released on June 30th, underscored the extent to which the extraordinary measures taken to contain COVID‑19 impacted economic activity in all major industrial sectors. Following a 7.5% decline in March, real gross domestic product fell by 11.6% in April as output declined across all 20 major industrial groups.

Lower production in the goods sector accounted for over one-third of April’s historic decline as construction and manufacturing output both fell by over 20%. All types of construction and manufacturing activity declined in April as businesses closed or limited their operations in response to emergency health measures.

Output in the service sector fell by 9.7% in April following the 8.1% decline in March. Retail trade contracted by nearly one-quarter as storefront closures impacted activity across the industry. Transportation and warehousing activity was also down by nearly one-quarter as border closures and travel restrictions continued to affect the industry. After falling by more than one-third in March, output in accommodation and food services fell by over 40% in April as many operators remained closed.

Statistics Canada also released an advance estimate of real gross domestic product for reference month May. Preliminary information for that month points to a 3% increase in real GDP. New data on building permits and international trade for May, released on June 29th and July 2nd, also suggest a partial rebound in economic activity.

The total value of building permits rose by about 20% in May, after falling 27% from February to April. May’s increase coincided with the easing of restrictions on construction activity in Ontario, Quebec and Prince Edward Island.

Following a historic decline in April, exports rose 6.7% in May, led by higher shipments of motor vehicles and parts as auto manufacturers and parts suppliers gradually began to resume production. Higher exports of crude oil also supported the headline increase in May.

While overall exports rose, imports continued to fall in May. Following April’s historic decline, imports in May fell an additional 3.9%, reflecting continued supply challenges as various economies around the world were progressively re-opening.

On June 30th, Statistics Canada also released a summary of tourism-related spending in Canada during the first quarter of 2020. Overall spending on tourism fell 14.2% in the first quarter—the largest decline on record. Spending by international visitors to Canada fell by a record 18.8%, as the number of travellers to Canada fell sharply due to border closures and travel restrictions implemented in mid-March. Tourism-related gross domestic product was down by nearly 15% in the first quarter, while the number of jobs attributable to tourism fell by 6.5%, both the largest quarterly declines since the data series began in 1986.

Weekly update - Friday, June 26, 2020

Over the last week, agency releases painted a grim portrait of COVID‑19’s impact on the Canadian economy during April. Public health measures put in place to contain the virus severely impacted industries such as food services and construction, with restaurants and work sites closed. After falling by over one-third in March, sales at food services and drinking places fell by about 40% in April (seasonally adjusted), with more than one half of operators reporting being closed at some point during April, and about four in ten reporting that they were closed for the entire month. With Ontario and Quebec shutting down all non-essential construction sites, investment in building construction plunged 45.9% to $8.4 billion in April, by far eclipsing the largest monthly decline on record. Both the residential (-49.2%) and non-residential (-38.8%) sectors reported record declines as investment decreased across the country. Ontario and Quebec reported a combined decline of $5.7 billion.

April also marked the first full month of border closures and flight restrictions which brought international travel to and from Canada to a virtual stop. Compared with April 2019, the number of arrivals from overseas countries (those other than the United States) fell by 96.6% while the number of Canadian residents returning from overseas was down 97.5%. With the Canada-U.S. border restricted to essential travel, total crossings fell 96% in both directions from 5.4 million trips in April 2019 to 203,000 in April 2020, the lowest number of monthly border crossings since record keeping began in 1972. This decline in international travel was felt at Canada’s major airports. In April, the number of take-offs and landings at airports with NAV CANADA towers were down 73.5% from April of 2019 with an almost 90% drop in transborder (with the U.S.) and other international movements.

Although the movement of goods was deemed an essential service during the shutdowns and border closures, Canadian railways have been impacted nevertheless by factory closures and disruptions to supply chains. In April, Canadian railways moved a total of 30.0 million tonnes of freight, a 10% decline from April of 2019. With the exception of a railway strike in November 2019, this was the largest monthly year-over-year decrease in over 5 years. Notable declines in the tonnes of commodities shipped included Automobiles and minivans (-91.3%), Fuel oils and crude petroleum (-33.6%), Lumber (-25.0%) and Iron ore and concentrates (-20.0%).

Data on payroll employment, earnings and hours for April underscored the unprecedented impact of physical distancing measures and non-essential business closures on Canada’s labour market. Following a decline of almost one million payroll jobs in March, payroll employment fell by over 1.8 million in April, led by severe losses in food and accommodation services, retail trade, construction, and manufacturing. Total payroll jobs decreased by 16.3% from February to April, with the largest relative declines occurring in Quebec, British Columbia, Newfoundland and Labrador, and Alberta.

The April payroll data also highlighted the differential impacts of COVID‑19 on Canada’s workforce, as job losses were concentrated among hourly-paid workers and in lower-paying service industries. Average weekly earnings rose by 6.1% from March to April, which partly reflected the large number of job losses in lower-paying sectors.

Upcoming releases: On June 29th, Statistics Canada will release Industrial product and raw materials price indexes as well as Building permits, both for May. On June 30th, National tourism indicators will be available for the first quarter of 2020 and Gross domestic product by industry for April. Canada’s international merchandise trade for May will be released on July 2nd.

Weekly update - Friday, June 19, 2020

After declining in March to the lowest level in almost four years, manufacturing sales fell by nearly 30% in April as over four in five establishments reported that COVID‑19 impacted their activities. Total manufacturing sales in April were $36.4 billion, well below the lowest monthly level of $38.3 billion observed during the 2008-2009 recession. About one-third of April’s decline reflected lower sales of motor vehicles and parts, which fell by over 90% as all Canadian assembly plants and many parts suppliers ceased operations. Sales of petroleum and coal products fell by 46% in April as refineries curtailed production in response to weak demand. After strengthening in March, sales of food manufacturers fell by 13% in April as operations at meat processing plants were impacted by COVID‑19.

Wholesale sales fell by an unprecedented 21.6% in April as four out of five wholesalers reported that COVID‑19 impacted their activities. Total sales in April were $49.8 billion, the lowest level since mid-2013. While all subsectors reported declines, lower auto-related sales accounted for over 40% of the total decrease in wholesale sales. Sales of motor vehicles, parts and accessories fell by 65% as shutdowns and weaker consumer demand severely impacted activity.

Retail spending fell by over one-quarter (-26.4%) in April to $34.7 billion. Sales at motor vehicles and parts dealers fell 44% and accounted for one-third of the overall decline in retail spending. Lower sales at food and beverage stores and gasoline stations also contributed to April’s decline. Based on respondent feedback, about one-third of retailers were closed during April, on average, for eight business days. E-commerce sales strengthened in April as many retailers started or expanded their online presence and curbside pick-up services in response to storefront closures. Online orders in April represented about 10% of the total retail sales.

Headline consumer inflation remained in negative territory in May for the second consecutive month. Consumer prices in May were down 0.4% on a year-over-year basis, after decreasing 0.2% in April. While prices at the pump rose from April to May as many countries began easing restrictions related to COVID‑19, gas prices in May remained 30% lower than in May of 2019. Excluding gasoline prices, consumer inflation slowed to 0.7% in May, the smallest year-over-year increase since early 2013.

Upcoming releases: Data on travel between Canada and other countries for reference month April will be released on June 23rd. Data on aircraft movements and railway carloadings, also for April, will be released on June 26th. Estimates of payroll employment, earnings and hours for April will be released on June 25th.

Weekly update - Friday, June 12, 2020

Declines in the value of financial assets pushed household net worth lower in the first quarter of 2020 as equities fell sharply in March in light of investor concerns over COVID‑19. Household net worth declined 3.8% in the first quarter as the value of equity and investment funds fell 15.5%. The ratio of household credit market debt to disposable income rose to 176.9% in the first quarter, while the household debt-to-asset ratio increased to 17.3%.

Severe reductions in auto-related spending contributed substantially to overall declines in economic activity as the COVID‑19 related shutdowns took effect. Lower spending on motor vehicles and parts weighed heavily on manufacturing, wholesale and retail sales in March, and on merchandise trade flows in March and April. Data from the New Motor Vehicle Sales Survey, released on June 12th, underscore the impact of COVID‑19 on auto sales. Measured on a year-over-year basis, new motor vehicle sales fell by 48.5% in March, and then by 74.6% in April, the two largest year-over-year decreases on record.

On June 10th, Statistics Canada released the leading indicator of cross-border traveller volume for May. The number of US and Canadian residents crossing the border from the United States by automobile remained at a virtual standstill in May as restrictions on non-essential travel remained in effect throughout the month. The number of U.S. travellers entering Canada by automobile through land ports was down 96% compared to May of last year, while the number of Canadians returning from the United States by automobile was down 95%.

In April, Canada’s international merchandise trade declined to the lowest level in almost a decade as economic shutdowns severely impacted trade flows. On June 9th, Statistics Canada released Canadian merchandise import transaction counts for May. Import transactions data tend to move in the same direction as monthly merchandise trade flows, and may provide a useful indicator of changes in merchandise trade activity. The transactions data for May point to a partial rebound in trade activity as restrictions on social and economic activity began to ease in Canada and abroad. The number of import transactions, measured month-over-month, increased by 15% in May, but remain about 18% below levels observed in May of last year. Merchandise trade values for May will be released on July 2nd.

Upcoming releases: Manufacturing sales for April will be released on June 15th. Wholesale and retail sales, both for April, will be released on June 18th and 19th, respectively. The consumer price index for May will be released on June 17th.

Weekly update - Friday, June 5, 2020

Following losses of more than three million from February to April, employment rose by 290,000 in May as several provinces had begun to ease public health restrictions and allow some non-essential businesses to re-open. Three-quarters of the overall employment increase in May was in full-time work, while nearly 80% of overall gains were accounted for by higher employment in Quebec. About one-half of the overall increase in employment in May was in construction and manufacturing industries, led by gains in Quebec. Following employment losses of 582,000 from February to April, employment in wholesale and retail trade rose by 107,000 in May, with one-half these gains occurring in Quebec. Ontario was the only province where employment continued to fall in May. Most restrictions on economic activity remained in place in that province during the LFS reference week of May 10th to May 16th.

Higher employment among core-age workers accounted for over one-half of the overall employment increase in May as the employment rate among this group rose to 73.7%. After falling by almost twenty percentage points from February to April, the employment rate among young Canadians aged 15 to 24 remained below 40% in May.

Canada’s unemployment rate rose to 13.7% in May as more people began looking for work. However, the number of Canadians who wanted to work but did not look for a job remained high in May, falling from 1.5 million in April to 1.4 million. During the reference week for May’s Labour Force Survey, over 1 in 5 Canadians (22.5%) lived in a household reporting difficulty meeting immediate financial obligations, up slightly from April (21.1%).

April’s international trade report, released on June 4th, underscored the severe impacts of COVID‑19 on Canadian trade flows, as shutdowns in manufacturing and consumer-oriented industries, coupled with sharp declines in energy prices, pushed total Canadian merchandise trade to its lowest monthly level in almost a decade. Merchandise exports fell by 30% in April to $32.7 billion, while merchandise imports declined by 25% to $35.9 billion. Almost all of the reduction in trade activity in April was due to lower trade flows between Canada and the United States, reflecting the high degree of economic integration between the two countries.

Severe declines in auto-related trade contributed substantially to lower trade activity in April. Exports of motor vehicles and parts were down over 80%, as widespread shutdowns impacted auto production on both sides of the Canada-U.S. border. Lower shipments of autos and auto parts accounted for more than one-third of the overall decline in Canadian exports. Similarly, imports of motor vehicles and parts, down almost 80%, accounted for more than one-half of the overall decline in Canadian imports.

Declines in energy-related trade were also an important factor in April. Energy exports fell by over 40% on steep price reductions and lower volumes, while energy imports fell by more than 50%. Lower exports and imports of consumer goods also contributed to April’s sharp reduction in trade activity, as economic shutdowns impacted the demand for consumer products.

Canada’s international trade in services also fell sharply in April, led by severe reductions in travel services due to COVID‑19 related border closures.

Economic shutdowns and work stoppages had a major impact on labour productivity in the business sector, released on June 3rd. Labour productivity rose 3.4% in the first quarter of 2020, as hours worked fell at a faster pace than business output. Hours worked in the business sector was down 5.8%, twice the largest decline observed during the 2008-2009 financial crisis.

Upcoming releases: Information on merchandise import transaction counts for May will be released on June 9th and the leading indicator of cross-border traveller volume for May will be released on June 10th.

The latest edition of Canadian Economic News providing a concise summary of selected Canadian economic events, and international and financial market developments, with a focus on news related to the COVID‑19 pandemic, is now available.

Weekly update - Friday, May 29, 2020

March’s GDP report underscored the widespread impact of measures to contain the spread of COVID‑19 on all segments of Canada’s economy. Real gross domestic product fell 7.2% in March as 19 out of 20 industrial sectors declined. Output in accommodation and food services industries fell by 36.9% in March, the largest decline on record. Transportation and warehousing fell by 12.2% as travel restrictions and border closures affected the sector. In addition, the output of manufacturers fell 6.5% in March, led by severe declines in auto and auto parts manufacturing as producers shuttered operations on both sides of the Canada-U.S. border. Overall, goods industries declined 4.6% in March while service industries fell 8.1%.

Real gross domestic product fell 2.1% in the first quarter, led by broad-based declines in household spending. Outlays on durable goods were down 6.4%, the largest decline since the first quarter of 1982, as spending on autos contracted sharply. Lower exports also contributed substantially to the overall decline in real GDP during the first quarter.

Statistics Canada also released an advance estimate of real gross domestic product in April. Preliminary information for April points to an 11% decline in real GDP.

During the last week in May, the agency released data confirming the devastating impacts of COVID‑19 on travel and tourism. With the border partially closed on March 18, travel from overseas was down by 52.7% in March. Then on March 21, the Canada-U.S. border was closed to non-essential travel, pushing border crossings down by 2.8 million trips for the month, the lowest number in almost 50 years. Leading indicators of international travel provided a glimpse into April with cross-border travel between the U.S. and Canada at a near standstill. The number of Americans entering Canada by automobile was down 97% from April of 2019. And at the four major Canadian airports still accepting international flights, the number of US and overseas residents entering Canada was down by 99.5% and 97.7% respectively, from April 2019.

The pain of travel restrictions, along with economic closings and physical distancing, was felt by both tourism and travel operators. From February to April, employment in accommodation and food services industries declined by half (50.0%) while hours worked decreased by almost two-thirds (63.8%). The Canadian airline industry hit financial turbulence in March with major carriers reporting a 41% decline in revenues, driven by the largest (44.1%) year-over-year drop ever recorded in the number of scheduled and charter passengers carried. The damage will continue into April as aircraft itinerant movements (take-offs and landings) at major airports fell by almost 70% from the week ending March 14 until the week ending April 24. Some airlines have ceased operations entirely while others continue to scale back services drastically.

To off-set lost revenue, some airlines are bolstering air cargo delivery for essential medical supplies and the growing volume of parcels, pointing to a shift in goods movement during the pandemic. In March, despite manufacturing sales falling to their lowest level in four years and a decline in both exports and imports, the tonnage of freight handled by Canadian railways was up 4.7% from the same month in 2019. This increase was driven by commodities such as potash, canola, wheat and crude petroleum. However, year-over-year drops in other products shipped by rail point clearly to COVID‑19, including lower volumes of automobiles (-48.1%), motor vehicle parts & accessories (-36.2%) and gasoline & aviation fuels (-35.4%). These declines are echoed by manufacturing as well as retail and wholesale trade reports.

Upcoming releases: On June 4 Statistics Canada will release Canadian international merchandise trade for April and then on June 5, the Labour Force Survey for May.

Weekly update - Friday, May 22, 2020

The Consumer Price Index declined 0.2% on a year-over-year basis in April as lower energy prices pushed the headline rate into negative territory for the first time since September 2009. Energy prices continued to fall sharply as a result of the COVID‑19 pandemic, and were down 23.7% on a year-over-year basis in April. Gasoline prices in April were down 39.3%, the largest year-over-year decline on record. Excluding energy prices, consumer price inflation in April was 1.6%.

Food prices rose 3.4% on a year-over-year basis in April, as strong demand coupled with supply-related issues bolstered prices for pork and beef. Prices for household cleaning products, measured on a monthly basis, rose sharply in April, as the demand for these products has strengthened as a result of COVID‑19. The pandemic also affected prices for clothing and footwear, which fell 5.9% on a monthly basis in April, the largest monthly decline on record. Many retailers applied large discounts to on-line prices in April to reduce inventories of seasonal stock in light of mandatory restrictions on in-store shopping.

Storefront closures had a substantial impact on retailers in March, as sales plunged 10.0% to $47.1 billion, the largest monthly decline on record. Lower sales among motor vehicle and parts dealers, clothing and clothing accessories stores, and gasoline stations contributed to the record decline. In contrast, sales at food and beverage stores rose by 22.8% in March. The on-line sales of Canadian retailers also strengthened, as many businesses opened or expanded their on-line platforms. Before adjusting for seasonality, retail e-commerce in March was up 40% on a year-over-year basis.

About 40% of retailers closed their doors in March as a result of COVID‑19 with an average length of closure of about five business days. Statistics Canada has also provided an advance estimate of retail sales in April, with preliminary data pointing to a decline of about 15%.

Wholesale sales fell 2.2% to $63.9 billion in March, reflecting sharp declines among wholesalers of autos and auto parts. Sales in the auto subsector were down 21.2% to $9.3 billion. In contrast, sales among wholesalers in the food, beverage and tobacco subsector rose 8.1% to $13.3 billion in March, the largest gain on record.

Over three-quarters of wholesalers reported that their business activities in March were impacted by COVID‑19, with wholesalers of home furnishings and personal goods among the most affected.

Upcoming releases: On May 25th, Statistics Canada will release Civil Aviation statistics for reference month March. Also for March, Railway Carloadings and Aircraft Movement statistics will be released on May 27th and 28th respectively. On May 29th, Statistics Canada will release gross domestic product for the first quarter of 2020.

Weekly update - Friday, May 15, 2020

COVID‑19 had a substantial impact on manufacturing sales in March, which fell 9.2% to $50.8 billion, the lowest level since June of 2016. Over three quarters of manufacturing establishments reported that their activities in March were impacted by COVID‑19. Manufacturers of transportation equipment were among the most affected, as all Canadian auto assembly plants and several North American parts suppliers scaled down production due to the pandemic. Sales of auto manufacturers and parts suppliers were both down over 30% in March. In all, over one-half of the estimated COVID‑19 related decline in March sales reflected lower sales among makers of transportation equipment. In contrast, food manufacturers reported higher sales in March, due to an increased demand for meat and dairy products.

Overall manufacturing sales are expected to continue to decline in April in light of physical distancing measures and economic shutdowns.

On May 11th, Statistics Canada released the leading indicator of cross-border traveller volume for April. The data showed that cross-border travel by automobile between Canada and the United States remained at a near standstill in April, following the sharp decline in March. The number of U.S. travellers entering Canada by automobile through land ports fell by nearly 97% compared to April of last year, while the number of Canadians returning from the United States by automobile was down 95%.

On May 13th, Statistics Canada released Canadian merchandise import transaction counts for April. Import transactions data tend to move in the same direction as monthly merchandise trade flows, and may provide a useful indicator of the level of merchandise trade activity. The number of import transactions fell 22% in April, and was down 27% when compared to April of last year. Merchandise trade values for April 2020 will be released on June 4th.

Upcoming releases: Wholesale sales and retail sales, both for reference month March, will be released on May 20th and May 22nd, respectively. The consumer price index for April will be released on May 20th.

Weekly update - Friday, May 8, 2020

Following employment losses of over one million in March, employment fell by nearly two million in April as the impacts of physical distancing and economic shutdowns on labour market activity became more apparent. Over one half of the employment losses in April were among core-age workers aged 25 to 54, with losses among core-age men (-646,000) exceeding those among core-age women (-491,000). Employment among youth aged 15 to 24 was down 480,000 in April, while employment among workers aged 55 and over fell by 377,000.

While losses in March were heavily concentrated in services, employment fell sharply in April in both service industries (-1,373,000) and goods industries (-621,000). Wholesale and retail trade, accommodation and food services, construction and manufacturing posted the largest declines.

From February to April, total employment in Canada has declined by 15.7%. The official unemployment rate has risen from 5.6% to 13.0% over this two-month period. In April, the unemployment rate would be 17.8% if adjusted to include individuals who were not counted as unemployed due to reasons specific to the COVID‑19 shutdowns.

Canada’s employment rate – the portion of the working age population that is employed – has declined by 9.7 percentage points from February to April. The overall employment rate in April was 52.1%. Among core-age workers, the employment rate in April was 72.6%, down from 80.2% in March. Among core-age men, the employment rate in April fell to 76.2%, while it declined to 68.9% among core-aged women. The employment rate among youth was 38.2% in April and has fallen almost 20 percentage points since February.

March’s international trade report, released on May 5th, highlighted the initial impacts of COVID‑19 on North American producers, as lower trade flows between Canada and the United States pushed total Canadian merchandise trade to its lowest monthly level since January 2018. Exports fell 4.7% in March, with lower shipments to the U.S accounting for about 80% of the overall decline. Similarly, imports were down 3.5%, almost all on account of lower shipments from the U.S.

The declines in March reflected lower shipments of motor vehicles and parts as automakers and several parts suppliers began to shutdown production as public health measures to contain COVID‑19 were being implemented. Declines in aircraft and aircraft equipment also contributed to the reduction in trade as production in this sector was also impacted by work stoppages related to COVD-19. Production stoppages in the transportation sector continued during April and are expected to impact exports and import levels in that month.

A report on Canada’s international trade in medical and protective goods was also released on May 5th. The analysis showed that exports of medical equipment and products, diagnostic products, and disinfectants and sterilization products were notably higher during the first three months of 2020 when compared to the same three-month period last year. By contrast, exports of personal protective equipment were down when compared to levels in the first quarter of 2019.

Imports of medical and protective equipment followed a different pattern. Imports of medical equipment and products, personal protective equipment, and disinfectants and sterilization products over the first three months of 2020 were lower than levels observed in the first quarter of 2019, while imports of diagnostic products rose substantially. The report is available on Statistics Canada’s website at COVID‑19: A data perspective.

The latest edition of Canadian Economic News providing a concise summary of selected Canadian economic events, and international and financial market developments, with a focus on news related to the COVID‑19 pandemic, is now available.

Weekly update - Friday, May 1, 2020

February’s GDP report, released on April 30th, highlighted major developments in the economy prior to the introduction of widespread restrictions to contain the spread of COVID‑19. Real gross domestic product was essentially unchanged in February, following three months of growth. Educational services fell sharply, reflecting rotating strikes by elementary and secondary school teachers in Ontario. Transportation services also declined in February, as rail blockades across the country impeded the movement of people and goods, while accommodation and food services declined as global travel restrictions related to COVID‑19 expanded. At the same time, higher output in mining, conventional oil and gas extraction, and wholesale industries partly offset declines in other sectors.

On April 29th, the agency released data for three transportation and travel related programs covering February. With the release of February data, the tonnage of freight carried by Canadian railways increased by almost 6% from the same month in 2019. This increase was due to an unusually low volume of rail freight moved in February 2019, caused by extreme cold weather, derailments and the cap imposed on oil sands production by Alberta. When measured on a year-over-year basis, the impacts of COVID‑19 were not yet discernible. Looking forward, Canada’s mainline railways are reducing costs and laying-off workers, anticipating volumes to plunge in a major way during the second quarter.

Itinerant aircraft take-offs and landings at Canadian airports in February were 9% higher than the same month in 2019. The growth was entirely driven by domestic traffic (up 11%) as transborder and international movements were essentially flat. Aircraft movements between Canada and China dropped by roughly 50% as Canada restricted flights between the two countries in late January. Consequently, the number of travellers from China declined by over one half, helping to push the total number of international arrivals to Canada from overseas countries down by 8.3% in February, the largest monthly decline in over twenty five years.

On April 29th, Statistics Canada also released data from a special survey of business conditions in March that highlighted the extent to which business operations have been impacted by measures to contain the spread of COVID‑19. Nearly two thirds of businesses that responded to the survey reported being highly affected by lower demand for their products and services, while about one third of businesses reported that their revenues in the first quarter of 2020 were down by 40% or more from the first quarter of 2019.

Upcoming releases: On May 5th, Statistics Canada will release international merchandise trade for March and then, on May 8th, the Labour Force Survey for April.

Weekly update - Friday, April 24, 2020

March’s Consumer Price Index, released on April 22nd, highlighted the impact of sharp declines in energy prices on headline consumer inflation. Lower demand for oil as the COVID‑19 pandemic escalated, coupled with tensions among oil-producing countries, pushed WTI benchmark crude prices from near USD $47 per barrel in early March to just over USD $20 per barrel at month’s end. Led by lower energy prices, the all-items CPI fell sharply from 2.2% in February to 0.9% in March, the largest year-over-year deceleration in the headline index since September 2006. Energy prices in March were 12% lower than in March of last year, reflecting the largest one-month decrease in energy prices since late 2008.

February’s wholesale and retail trade reports, released on April 20th and 21st, highlighted the impacts of COVID‑19 and the domestic rail blockades on business activity during the month. As expected, the effects of these events were not as severe as what is anticipated for March data. Wholesalers reported that for February, sales fell by about $760 million due to these disruptions, with machinery and equipment and food wholesalers among those most affected. Despite these disruptions, overall wholesale sales rose by 0.7% in February, the third consecutive monthly increase. Without the impacts of COVID‑19 and the rail blockades, wholesale sales in February would have risen by an estimated 1.5%.

In the case of retail sales, over one in ten retailers reported that both COVID‑19 and the rail blockades negatively affected their sales in February, but these disruptions had little impact on overall retail sales, which advanced for the fourth consecutive month. While negative impacts on sales were more frequently reported by electronics and appliance store retailers and gasoline stations, some retailers, including sporting goods, hobby, book and music stores, and building material and garden equipment dealers, more commonly reported that these disruptions had a positive impact on sales in February.

Upcoming releases: On April 29th, Statistics Canada will release data for three transportation and travel related programs for reference month February: monthly railway carloadings, aircraft movement statistics, and travel between Canada and other countries.

Weekly update - Friday, April 17, 2020

On April 15th, the agency released a flash estimate of gross domestic product in March, designed to inform early assessments of the impact that business shutdowns and restrictions on physical distancing are having on overall economic activity. The decline in real GDP in March was estimated at 9%, the largest monthly decrease observed for the current data series (which tracks movements back to 1961). March’s flash estimate yields an approximate 2.6% decline in real GDP for the first quarter of 2020.

Canadian manufacturers faced two major challenges in February: the effects of supply chain disruptions stemming from COVID‑19 related shutdowns in Asia, along with the impacts of domestic rail blockages that impeded the movement of many manufactured goods across the country.

Respondents to the Monthly Survey of Manufacturing reported that the combined impacts of the COVID‑19 disruptions and the rail blockades lowered total manufacturing sales in February by an estimated $465 million. Overall, nearly one out of every ten establishments reported that their activities were impacted by COVID‑19, with producers of textiles, petroleum and coal products, electrical appliances, and computers and electronic products being among the most affected. Similarly, just over one in ten establishments reported that their activities were affected by the rail blockades, led by producers of metals, chemicals and wood products.

Despite the impact of these events, overall manufacturing sales rose 0.5% in February, after declining for five consecutive months. Without these disruptions, total manufacturing sales would have risen by an estimated 1.3%.

Tourism was also greatly impacted by the pandemic. Two leading indicators were released that brought the immediate impact of COVID‑19 on international travel into sharper focus—estimates of cross-border traveler volumes by automobile, and estimates of international arrivals to Canada by air, both released on April 14th. In March, the number of Americans entering Canada by automobile fell by 60% on a year-over-year basis, reflecting large declines in Quebec, Ontario and British Columbia. Similarly, the number of international visitors arriving in Canada by air in March was also down about 60% when compared to levels observed in March of last year. Both releases highlighted the rapid decline in travel volumes during the last half of the month.

Weekly update - Thursday, April 9, 2020

These articles provide commentary on data from major economic releases as they relate to the potential impacts of COVID‑19. Articles will be released on a weekly basis as new data and analysis become available.

The employment report for March provided an initial assessment of the extent to which labour market activity was impacted as the COVID‑19 pandemic was rapidly escalating. The reference week for March’s Labour Force Survey was the 15th to the 21st, a period in which many businesses and organizations were scaling-back or shutting down as states of emergency were being declared and restrictions on international travel were being put in place.

The reference week for the March survey basically overlaps the mid-month surge in the number of Employment Insurance applications, which reportedly totaled over 900,000 from the 16th to the 22nd. However, the reference week predates the mandated closures of non-essential businesses that several provinces, including Ontario and Quebec, enacted later in the month. Additional employment losses stemming from these mandated closures may not be fully reflected in the March survey data.

Employment fell by over one million in March (-1,011,000) with losses among private sector employees accounting for over 80% of the total decline. Overall losses were roughly split between full-time work (-474,000) and part-time work (-537,000). Employment among core-age persons, those aged 25 to 54, fell by 426,000.

The national unemployment rate increased by 2.2 percentage points in March to 7.8%. The employment rate, the percentage of the working age population that is employed, fell 3.3 percentage points to 58.5%. Among core-aged persons, the unemployment and employment rates in March were 6.6% and 80.2%, respectively.

The one-month decline in employment experienced in March is unprecedented, and is about two and a half times as large as the cumulative decline in employment experienced during the 2008-2009 recession. From September 2008 to June 2009, overall employment fell by 400,000, led by sharp declines in full-time work and private sector employees, as the unemployment rate rose from 6.1% to 8.7%. The employment rate over this nine-month period declined from 63.4% to 61.3%. Among core-aged persons, the unemployment rate rose to 7.6% while the employment rate remained at or above 80%.

Upcoming releases: Monthly Survey of Manufacturing, to be released April 16th.

The manufacturing report for February will include supplementary information designed to evaluate the impact of the COVID‑19 pandemic and the rail blockades on manufacturing activity. The next weekly update will feature highlights from this report.

In addition, a leading indicator of cross-border travel for March as well as a leading indicator of international arrivals by air for the first quarter of 2020 will be released on April 14th.

Weekly update - Friday, April 3, 2020

These articles provide commentary on data from major economic releases as they relate to the potential impacts of COVID‑19. Articles will be released on a weekly basis as new data and analysis become available.

The published economic data for January provide a baseline read on economic activity in Canada prior to the intensification of the COVID‑19 crisis in recent months and February’s rail blockades. Many of the headline numbers in January pointed to stronger economic conditions to begin the year. Real GDP rose for the third consecutive month in January as goods-producing industries, led by higher output in non-automotive manufacturing, posted their largest monthly gain since August of last year. The output of services industries continued to advance, albeit at a slower pace, despite declines in transportation and educational services. Both total employment and payroll employment rose in January, while average weekly earnings, measured on a year-over-year basis, accelerated to 4.0% as earnings strengthened in most provinces.

January’s merchandise trade report offered some early insight into the initial impacts of COVID‑19 on Canadian economic activity. Merchandise trade with China declined substantially in January as efforts to contain the virus in that country were intensifying and the impacts of factory shutdowns in China on global supply chains were being widely assessed. While much of the overall decrease in Canadian exports in January reflected lower shipments to the United States, exports to China declined 9.8%. At the same time, imports from China fell 12.7% as imports from the United States and South Korea increased.

The merchandise trade report for February, released on April 2nd, highlighted further declines in Canada-China trade, as exports to China fell an additional 6.4% while imports from China decreased 6.8%. Lower imports from China in February reflected declines in computers and peripherals, cellphones, and clothing and accessories. The February trade report also highlighted a notable decline in imports from South Korea, as efforts to contain the spread of COVID‑19 in that country intensified.

Upcoming releases: Labour Force Survey for reference month March, to be released April 9th.

The intensification of the COVID‑19 crisis and the rail blockades had no discernible impact on February’s employment report. Overall employment was little changed in February as total hours worked rose by 1.2%, supported by broad-based increases across industries. Data from March’s Labour Force Survey, to be released on April 9th, will provide an initial assessment of changes in labour market activity as the scope and breadth of the COVID‑19 crisis in Canada were rapidly intensifying.

A special edition of the Canadian Economic News providing a concise summary of selected Canadian economic events, and international and financial market developments, with a focus on news related to the COVID‑19 pandemic is now available.

Definitions
Real gross domestic product (chained (2012) dollars)
Gross domestic product at basic prices, all industries, chained (2012) dollars. Estimates of real GDP are seasonally adjusted at annual rates.
Statistics Canada table 36-10-0434-01.
Consumer Price Index (2002=100)
All-items consumer price index (2002=100), not adjusted for seasonality.
Statistics Canada table 18-10-0004-01.
Employment (persons)
Employment, both sexes, ages 15 and over, seasonally adjusted.
Statistics Canada table 14-10-0287-01.
International merchandise trade, exports (dollars)
International merchandise exports, total of all products, measured on a balance of payments basis, current dollars, seasonally adjusted.
Statistics Canada table 12-10-0121-01.
International merchandise trade, imports (dollars)
International merchandise imports, total of all products, measured on a balance of payments basis, current dollars, seasonally adjusted.
Statistics Canada table 12-10-0121-01.
Retail trade sales (dollars)
Retail sales, current dollars, seasonally adjusted.
Statistics Canada table 20-10-0008-01.
Actual hours worked at main job (hours)
Total actual hours worked, all industries, seasonally adjusted.
Statistics Canada table 14-10-0289-01.
Manufacturers' sales (dollars)
Sales of goods manufactured, current dollars, seasonally adjusted.
Statistics Canada table 16-10-0047-01.
Aircraft itinerant movements, domestic (number of flights)
Arrival and departure within Canada at airports with NAV CANADA towers.
Statistics Canada table 23-10-0008-01.
Aircraft itinerant movements, transborder (number of flights)
Arrival and/or departure between Canada and the United States at airports with NAV CANADA towers.
Statistics Canada table 23-10-0008-01.
Aircraft itinerant movements, other international (number of flights)
Arrival and/or departure between Canada and a country other than the United States at airports with NAV CANADA towers.
Statistics Canada table 23-10-0008-01.
Railway carloadings (tonnes)
Total freight traffic carried (intermodal, non-intermodal and from U.S. connections).
Statistics Canada table 23-10-0216-01.
Travellers from the United States (persons)
Travellers from the United States, seasonally adjusted.
Statistics Canada table 24-10-0005-01.
Travellers from other countries (persons)
Travellers from countries other than the United States, seasonally adjusted.
Statistics Canada table 24-10-0005-01.
Canadian residents returning from United States (persons)
Canadian travellers returning from the United States, seasonally adjusted.
Statistics Canada table 24-10-0005-01.
Canadian residents returning from other countries (persons)
Canadian travellers returning from countries other than the United States, seasonally adjusted.
Statistics Canada table 24-10-0005-01.
Sales at full-service restaurants
Receipts, current dollars, seasonally adjusted.
Statistics Canada table 21-10-0019-01.
Sales at limited-service eating places
Receipts, current dollars, seasonally adjusted.
Statistics Canada table 21-10-0019-01.
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