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 (GDP) 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 GDP 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.

Source: Statistics Canada