Canada’s Economy Expanded by 0.1% in December Amid Tightened Covid-19 Restrictions

The Canadian economy continues to slowly expand, following a pandemic-ravaged year that plunged GDP levels to record lows.

In December, GDP grew by 0.1%, following a 0.8% increase in November. Despite the relatively slow growth in the final month of the year, December marked the eighth consecutive month of gains, after Canada’s economy plunged into a steep recession in March and April. This puts economic activity 3% below pre-pandemic levels recorded in February 2020.

The goods-producing industries expanded by 0.6%, while Canada’s service-producing industries contracted by 0.1%, as 12 of the 20 industrial sectors reported some form of growth. The mining, quarrying, and oil and gas extraction sector increased by 2.9% in December, marking the fourth straight month of gains. The majority of the expansion was concentrated in the oil sands extraction subsector, which rose by 4% as Alberta recorded the highest level of synthetic oil production on records dating back to 1997.

Among other notable gains, Canada’s real estate and rental and leasing sector grew by 0.9% in the final month of the year, making December the eighth consecutive month of increases. Likewise, the construction sector increased by 1.2%, after declining by 0.3% in the previous month. The residential construction subsector recorded a gain of 1.4% in December, as single-unit and alterations and improvements increased. Conversely though, non-residential construction declined by 0.3% for the sixth straight month.

In the meantime, the economic sectors that were hit the hardest by the pandemic continue to fall behind, especially following the tightening of restrictions in several key regions across Canada. Retail trade fell by 3.3% in December, after recording growth for seven straight months. Despite the holiday shopping season that typically accompanies the final month of the year, activity remained low, with stores specializing in clothing and clothing accessories down by 13.6%, sporting goods, hobby, book and music stores recording a decline of 19.9%, and electronic and appliance stores down by 10.3%. The accommodation and food services sector was also hit particularly hard by additional Covid-19 restrictions, contracting by 6.8% in December.

Canada’s manufacturing sector also posted a decline in December, falling by 1.1% amid a drop in sales and lower inventory levels. This was only the second decline for the sector since April. Similarly, the wholesale sector also recorded its second contraction since April, falling by 1.2% in December. The decline was largely due to motor vehicle and motor vehicle parts and accessories wholesaling being down by 3.1%, amid reduced production and exports of vehicles.

With December marking the conclusion of what has been a record economic contraction in 2020, Statistics Canada reported that activity was down in 17 of the 20 industrial sectors last year. GDP fell by 5.4% in 2020, following an expansion of 1.9% in the previous year. Service-producing industries were hit particularity hard by the Covid-19 pandemic, falling by 4.9% over the year. Likewise, the goods-producing sector contracted by 6.2% in 2020.


Information for this briefing was found via Statistics Canada. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

2026 Could Be Gold’s Biggest Year Yet!? | Ryan King – Equinox Gold

Gold Is Screaming Higher While Currencies Burn | Simon Ridgway – Rackla Metals

We Have the Highest-Grade Antimony Deposit in North America!? | Jim Atkinson -Antimony Resources

Recommended

Canadian Copper Secures $8 Million Lead Order From Ocean Partners As Part Of Larger Funding Round

Northern Superior Expands Philibert With 350 Metre Step Out Testing 1.10 g/t Gold Over 25.5 Metres

Related News

Canada Faces Challenges in EV Adoption, Survey Finds

As Canada anticipates the influx of electric vehicles (EVs), a recent Ipsos Canada survey commissioned...

Wednesday, October 18, 2023, 02:57:00 PM

Mayor of Terry Fox’s Hometown Bashes Trudeau for New Passport Design

The design for Canada’s new high-tech passport was unveiled on Wednesday by Sean Fraser, Minister...

Thursday, May 11, 2023, 12:21:36 PM

US GDP Surges By 33.1% In Third Quarter, Surpassing Expectations

Following the largest economic slump in history, it appears that the US economy has rebounded...

Saturday, October 31, 2020, 03:49:00 PM

Canada Grants Airbus Waiver to Use Russian Titanium Despite Sanctions

The Canadian government has granted European aerospace giant Airbus (EPA: AIR) a temporary waiver to...

Thursday, April 25, 2024, 10:42:25 AM

Canada’s Unemployment Rate Falls by 0.1% in October as Labour Recovery Slows

It appears that Canada’s economic recovery efforts continue to be stalled amid the recent surge...

Friday, November 6, 2020, 01:31:00 PM