Statistics Canada building and signs are pictured in Ottawa on Wednesday, July 3, 2019. THE CANADIAN PRESS/Sean Kilpatrick

Statistics Canada building and signs are pictured in Ottawa on Wednesday, July 3, 2019. THE CANADIAN PRESS/Sean Kilpatrick

Better-than-expected Jan. growth a good sign for pandemic’s third wave: economists

The shadow hanging over the economy now is COVID-19 and its variants that are pushing up caseloads

The Canadian economy grew 0.7 per cent in January in the face of severe public health restrictions, and appears to have grown almost as much in February, Statistics Canada said Wednesday.

January’s reading for real gross domestic product compared with a gain of 0.1 per cent in December, and topped the data agency’s preliminary estimate for the month of 0.5 per cent.

It was the ninth consecutive monthly increase since the plunge in the economy last year at the start of the pandemic in March and April when workers were ordered home and non-essential businesses forced to close.

Almost one year later, Statistics Canada said that total economic activity was still about three per cent below the February level last year, before the pandemic began.

The agency’s preliminary estimate for February this year showed growth of 0.5 per cent for the month.

TD Bank senior economist Sri Thanabalasingam said January was a solid month for the Canadian economy, despite the tighter public health restrictions in Ontario and Quebec, reflecting what he called the “growing resilience of the economy to the pandemic.”

“With Statistics Canada projecting continued growth in February, the first quarter of 2021 is shaping out to be a very good one for Canada,” Thanabalasingam said.

The Bank of Canada recently revised its expectations for the first quarter of the year, saying earlier this month that the economy should overall grow, rather than contract as it expected in January.

With early indicators suggesting improved business and consumer confidence for March, total annualized growth for the quarter appears to be on track to hit or exceed five per cent, RBC economist Claire Fan wrote in a note.

The shadow hanging over the economy now is COVID-19 and its variants that are pushing up caseloads across the country, placing pressure on provinces to tighten restrictions once again.

BMO chief economist Douglas Porter said the better-than-expected economic picture in January, even as the country shed more than 200,000 jobs, suggests sectors will be able to manage through any third-wave lockdowns or restrictions in the coming weeks.

But he cautioned that some sectors are going to feel the pain more than others. Arts and entertainment is half of what it was one year ago, he said, while hotels and restaurants are about 40 per cent below pre-pandemic activity.

Large sectors like construction and manufacturing are down about one per cent from a year ago, Porter said.

“This is the ultimate definition of this so called K-shaped recovery, where the industries at the upper end of the K are basically almost all the way back to where they were before the pandemic began, and those at the bottom of the K are desperately weak,” Porter said in an interview.

“If there’s good news, when things are eventually able to reopen again, you’re going to see a spectacular bounce in those sectors that remain 40 or 50 per cent below pre pandemic levels.”

The growth in January came as goods-producing industries rose 1.5 per cent, while services-producing industries added 0.4 per cent.

Statistics Canada said the wholesale trade sector rose 3.9 per cent in January, more than offsetting a 1.5 per cent contraction in December.

The manufacturing sector grew 1.9 per cent in January to offset a decline of 0.7 per cent in December, while the mining, quarrying, and oil and gas extraction sector grew 2.7 per cent, its fifth consecutive month of growth.

ALSO READ: B.C.’s iconic West Coast Trail to re-open to visitors in June 2021

Craig Wong and Jordan Press, The Canadian Press


Like us on Facebook and follow us on Twitter.

Want to support local journalism during the pandemic? Make a donation here.

Coronaviruseconomy

Just Posted

Gerry Thiessen, mayor of Vanderhoof shown talking to students on May 17. Thiessen and other members of council officially announced that the rainbow crosswalk will be a reality. They were ready to paint a few lines of of paint onto the crosswalk, but weather wasn’t suitable for it. District staff will be jumping onto the project as soon as the weather allows it. (Aman Parhar/Omineca Express)
School District 91 holds first ‘Share the Love Day’

International Day Against Homophobia, Transphobia and Biphobia recognized

Pictured above is a BCEHS re-enactment of paramedics attending an overdose. Toxic illicit drugs have claimed the lives of 498 British Columbians in the first three months of 2021, said the BC Coroners Service. (BCEHS photo)
Increase in overdose cases a concern: Fort St. James RCMP

Police issue public health announcement

A prowling coyote proved no match for a stray black cat who chased it out of a Port Moody parking lot Friday, May 14. (Twitter/Screen grab)
VIDEO: Little but fierce: Cat spotted chasing off coyote by Port Moody police

The black cat is seen jumping out from under a parked car and running the wild animal out of a vacant lot

A forest of dance-protesters outside the BC Legislature on April 11. These participants were doing the Dance for the Ancient Forest in support of the Fairy Creek blockade and against old-growth logging. (Zoë Ducklow/News Staff)
Arrests begin at Fairy Creek blockade on Vancouver Island

Five protesters arrested as RCMP begin to enforce injunction

A thunderstorm pictured in Fraser Valley in 2021. (Black Press Media/Jaimie Grafstrom)
Wildfire concerns sparked after 320+ lightning strikes blasted B.C. yesterday

Approximately one-quarter of the province is currently listed as being at moderate risk of fire

A restaurant server on White Rock’s Marine Drive serves customers on a roadside patio. Indoor dining and recreational travel bans have been in effect since late March in B.C. (Peace Arch News)
B.C.’s COVID-19 infection rate falls to 411 cases Tuesday

360 people in hospital, up slightly, two more deaths

The Banff National Park entrance is shown in Banff, Alta., Tuesday, March 24, 2020. THE CANADIAN PRESS/Jeff McIntosh
Minister asks Canadians to camp carefully in national parks as season starts

Kitchen shelters in Banff National Park closed, trails on Vancouver Island will only be one-way

Names of those aboard the ship are seen at Komagata Maru monument in downtown Vancouver, on Tuesday, May 18, 2021. The City of Vancouver has issued an apology for its racist role in denying entry to 376 passengers aboard a ship that was forced to return to India over a century ago. Mayor Kennedy Stewart says discrimination by the city had “cruel effects” on the Sikhs, Hindus and Muslims aboard the Komagata Maru, which arrived in Burrard Inlet on May 23, 1914. THE CANADIAN PRESS/Darryl Dyck
Vancouver mayor says sorry for city’s role in turning away South Asians in 1914

Kennedy Stewart has declared May 23 as the annual Komagata Maru Day of Remembrance

A crew of WestCoast WILD Adventures employees tackled an onslaught of litter left at the ‘Locks of Love’ fence at Wally Creek on May 2. (Anne-Marie Gosselin photo)
Litter woes consume popular ‘Locks of Love’ fence on B.C.’s Pacific Rim

Popular view spot near Tofino plagued by people hanging masks and other unwanted garbage

Vincent Doumeizel, senior advisor at the United Nations Global Compact on Oceans, as well as director for the Food Programme for the Lloyd’s Register Foundation, pulls up some sugar kelp seaweed off the French coast in April 2020. He was the keynote speaker during the opening ceremony of the inaugural Seaweed Days Festival. (Vincent Doumeizel/Submitted)
Let’s hear it for seaweed: slimy, unsexy and the world’s greatest untapped food source

Experts talks emerging industry’s challenges and potential at Sidney inaugural Seawood Days Festival

Troy Patterson, a Cadboro Bay 15-year-old, got a virtual meeting with B.C.’s environment minister months after he started an online petition calling for construction of the Coastal GasLink pipeline to stop. (Jake Romphf/News Staff)
B.C. teen’s 23,000-name Coastal GasLink petition gets him an audience with the minister

15-year-old Saanich high school student and George Heyman discussed project for about 30 minutes

Most Read