Real gross domestic product (GDP) grew 1.1% in March, following 0.4% growth in February. This 11th consecutive monthly increase continued to offset the steepest drops in Canadian economic activity on record observed in March and April 2020. However, total economic activity was about 1% below the level observed in February 2020, before the COVID-19 pandemic.
Both goods-producing (+1.1%) and services-producing (+1.1%) industries were up, as 18 of 20 industrial sectors posted increases in March.
Preliminary information indicates an approximate 0.8% decline in real GDP in April, the first decline since April 2020. Declines in retail trade and accommodation and food services reflect in part additional public health measures in some parts of the country. There are also notable declines in manufacturing, real estate and rental and leasing, and educational services. Owing to its preliminary nature, this estimate will be revised on June 30 with the release of the official GDP data for April.
Retailing up on favourable conditions
Retail trade increased 3.7% in March, following a 5.9% jump in February, as 10 of 12 subsectors were up.
Activity at building material and garden equipment and supplies retailers jumped 15.3% in March as the continued easing of restrictions and temperatures above the seasonal average in some parts of the country contributed to the growth. Clothing and clothing accessories retailing also posted a strong increase (+18.6%) in March, following a 34.1% jump in February.
Sporting goods, hobby, book and music stores (+7.4%), furniture and home furnishings stores (+5.1%), and other traditional brick-and-mortar stores benefited from regulations permitting in-store shopping. Food and beverage stores (-0.9%) and gasoline stations (-0.8%) offset some of the gains.
First quarter of 2021
Economic activity continued to grow in the first quarter of 2021. Overall, 15 of 20 sectors recorded gains in the quarter as both goods-producing (+2.2%) and services-producing (+1.4%) industries were up. This third consecutive quarterly increase continued to offset the historic drop in output in the second quarter of 2020.
Construction expanded for a third consecutive quarter, rising 3.8% in the quarter, as most types of construction activity were up. Residential building construction jumped 7.6%, as all components increased, led by single-family home construction and home alterations and improvements. Repair construction (+3.5%) and engineering and other construction activities (+0.9%) rose, while non-residential building construction remained unchanged (0.0%).
Mining, quarrying, and oil and gas extraction increased 5.5%, as all subsectors recorded growth. Mining and quarrying (excluding oil and gas) expanded 9.1%, as metal ore (+9.8%), non-metallic mineral (+6.4%) and coal (+11.3%) mining were all up in the first quarter. Oil and gas extraction grew 2.4%, led by a 4.4% increase in oil sands extraction activity. Oil and gas extraction (except oil sands) edged up 0.1%, as a decline in crude petroleum extraction was more than offset by higher natural gas production.
The largest contributor to the increase in the services-producing industries was a 2.1% rise in the public sector (educational services, health care and social assistance, and public administration), as all three components rose. Health care and social assistance grew 2.8%, driven by ambulatory health care services (+5.2%) and hospitals (+1.1%). Public administration rose 1.8%, while educational services were up 1.7% in the quarter.
The real estate and rental and leasing sector rose 1.3% as increases in the majority of subsectors contributed to the growth. Continued strong home resale activity in many markets across the country pushed activity at the offices of real estate agents and brokers (+8.4%) to record-high levels in the first quarter of 2021.
The professional, scientific and technical services sector increased 2.2% in the first quarter, up for the third consecutive quarter. Legal, accounting and related services (+3.0%) and computer systems design and related services (+2.3%) led growth in the sector.
Retail trade rose 1.5% in the first quarter of 2021. The continued lifting and easing of lockdown measures in the latter part of the quarter, in many parts of the country, contributed to the sector’s growth, as activity increased at non-essential retailers. Building material and garden equipment and supplies dealers (+8.1%), non-store retailers (+9.3%) and general merchandise stores (+3.4%) led the growth.
The finance and insurance sector rose 1.0% in the first quarter of 2021 and has grown for eight consecutive quarters. Depository credit intermediation and monetary authorities (+0.8%), financial investment services, funds and other financial vehicles (+2.2%) and insurance carriers and related activities (+1.2%) were all up.