COVID-19 Reducing Atlantic Canada’s GDP
Preliminary Estimates as of April 20
APEC estimates Atlantic Canada’s real GDP will decline as a result of COVID-19.
- March 2020: down 10% from the previous month, similar to Statistics Canada preliminary estimate of a 9% decline nationally.
- April 2020: 13% below March 2020.
- Q2 2020: a drop of 21% relative to Q2 2019, assuming current health measures continue throughout the spring.
- 2020: down 11% from 2019, assuming a slow phased reopening starting in June.
- Newfoundland and Labrador will likely face a larger drop in income in 2020 due to lower commodity prices and offshore royalties. It is also experiencing a halt to several major capital projects and the postponement of future investment projects.
- There is significant uncertainty about the duration of the shutdown and the speed and length of the recovery. The Bank of Canada shows a range of possible scenarios from a quick recovery to a deep impact, slow recovery scenario that takes years for GDP to recover.
Impacts by Industry
- Most Atlantic industries have had to adjust their operations to comply with COVID-19 health requirements. Some also face a decline in demand, supply chain challenges and a reduced workforce.
- The biggest percentage declines in output are in accommodation, food & beverage, and arts, entertainment & recreation. These two industries account for a combined 3% of Atlantic GDP but 9% of employment. Some retail sub-sectors also suffered large declines in output (>50%) but the overall drop in retail sales is masked by increased spending at grocery stores.
- Construction, primary industries, wholesaling, manufacturing and transportation have also faced major declines in output.
Note: These preliminary estimates are intended to provide an early indication of the overall effect of the Great Shutdown on Atlantic Canada’s economy. They are not based on comprehensive survey and other data sources used to compile Statistics Canada’s provincial and industry GDP. As Statistics Canada does not produce a monthly GDP series for the Atlantic provinces, a proxy monthly GDP series was computed using Statistics Canada data on annual GDP by industry and monthly employment by industry. The estimates for March and April were derived from a variety of data sources including confidential information provided to APEC, industry surveys and other economic intelligence.