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

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A man was sentenced to more than a year in jail for a late-night robbery in Courtenay last April. Photo by Mike Chouinard
Late-night Courtenay robbery results in 500-plus days in jail

Heatley’s sentence also includes probation, DNA order, firearms ban

A 3.0-magnitude earthquake occurred off Ucluelet just after 12:30 a.m. on April 10 and was reportedly felt as far south as Oregon. (Map via United States Geological Survey)
Quake off Ucluelet reportedly felt as far south as Oregon

Magnitude 1.5 earthquake also reported off Vancouver Island’s west coast hours earlier

The CSRHD board has diverging views on its relationship with Island Health. File photo
Comox-Strathcona board ponders relationship with Island Health

“We have to stand together … to get our share of the health budget.”

The CVCDA Accessibility Project is creating safer ramps at the Courtenay facility. Photo supplied
Accessibility project underway at Comox Valley Child Development Association

Over the past month, you may have noticed some construction underway behind… Continue reading

B.C. Health Minister Adrian Dix and Premier John Horgan describe vaccine rollout at the legislature, March 29, 2021. (B.C. government)
1,262 more COVID-19 infections in B.C. Friday, 9,574 active cases

Province’s mass vaccination reaches one million people

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Two-year-old Ivy McLeod, seen here on April 9, 2021 with four-year-old sister Elena and mom Vanessa, was born with limb differences. The family, including husband/dad Sean McLeod, is looking for a family puppy that also has a limb difference. (Jenna Hauck/ Chilliwack Progress)
B.C. family looking for puppy with limb difference, just like 2-year-old Ivy

Ivy McLeod born as bilateral amputee, now her family wants to find ‘companion’ puppy for her

A vehicle that was driven through the wall of a parkade at Uptown Shopping Centre and into the nearby Walmart on April 9 was removed through another hole in the wall later that night. (Photo via Saanich Police Department and Ayush Kakkar)
Vehicle launched into B.C. Walmart removed following rescue of trapped workers

Crews cut new hole in parkade wall to remove vehicle safely

Four members with Divers for Cleaner Lakes and Oceans were out at Cultus Lake on March 28 and 29 hauling trash out of the waters. (Henry Wang)
PHOTOS: Out-of-town divers remove 100s of pounds of trash from Cultus Lake

Members of Divers for Cleaner Lakes and Oceans hauled out 470 pounds of trash over two days

As of Saturday, April 10, people born in 1961 are the latest to be eligible for a COVID-19 vaccine. (Black Press files)
B.C. residents age 60+ can now register to get their COVID-19 vaccine

Vaccine registration is now open to people born in 1961 or earlier

A new saline gargle test, made in B.C., will soon be replacing COVID-19 nasal swab tests for kids. (PHSA screenshot)
Take-home COVID-19 tests available for some B.C. students who fall ill at school

BC Children’s Hospital plans to provide 1,200 kits to Vancouver district schools this April

Ruming Jiang and his dog Chiu Chiu are doing fine following a brush with hypothermia that saw several people work together to get them out of the Fraser River near Langley’s Derby Reach Park on March 25, 2021 (Special to the Advance Times)
Man finds men who rescued him from drowning in B.C.’s Fraser River

A grateful Ruming Jiang says he will thank them again, this time in person when the pandemic ends

The 10-part Netflix series Maid, which is being exclusively shot in Greater Victoria, was filming near Prospect Lake in Saanich last month. (Photo courtesy Fred Haynes)
Province announces $150,000 towards South Island film studio, fulfilling B.C. NDP promise

Investment to fund movie studio feasibility study at Camosun College

Most Read