Canada’s economic growth ground to a halt in the fourth quarter of 2019. With the economy already on precarious footing, the added shocks of the recent rail blockade protests, the arrival of COVID-19, and a collapse in oil prices have brought the country to the brink of recession.
The Canadian economy grew by just 0.3 per cent in the fourth quarter of 2019, its weakest performance since the second quarter of 2016. The sluggishness was the result of declines in business investment and exports, which were only partially offset by continued strength in consumer spending.
Now, with the economy being hit by a slew of additional shocks, we expect business investment and exports to post substantial declines and consumer spending to ease. As a result, economic growth will contract by a projected 2.7 per cent in the second quarter. However, growth should resume in the third quarter, allowing the economy to avoid a technical recession. Unfortunately, there are huge downside risks to our outlook due to the unpredictability of the coronavirus pandemic. Overall, we expect growth of just 0.3 per cent in 2020 followed by a rebound to 2.5 per cent growth in 2021.
Businesses are stuggling to keep afloat. Some places like Tech!Espresso in Edmonton who offer in-home services are forced to close this portion of their service, leaving only a small option open to serve their customers via remote support over the internet. Luckily, this type of computer service in Edmonton is still an option for many – but is it enough? As a Geek Squad alternative, they may be the way to go to have your computer repaired without coming in contact with people in risk of infection.
The Index of Consumer Confidence fell 32.0 points in March, the largest monthly decline ever.
Canadians are anxious about the coronavirus. This has implications for Canada’s economy given that consumers have been the main engine of economic growth. With people being encouraged to self-isolate, large gatherings being mostly cancelled, and tourism activity drying up, many Canadians are staying home, which will have a profound impact on economic growth.
There were no positives in this month’s survey—every region saw a double-digit decline in confidence and every question saw a significant weakening in responses.