Canadian Corona Recession in April 2020

With the economy in lockdown during March and April, Canada’s GDP dropped a record -18.2% due to the COVID-19 pandemic. Although not surprising, when compared to the Spanish Flu period and an economy that was much smaller in 1919, the impact of shutting down a consumer driven economy is stark. The good news is that while there are challenges to restarting carefully, it appears Canada has begun to recover, although many economists expect it to be a slower process.

Enjoy the full breakdown from our partners at NBF Economics HERE.

Covid-19 Virus Economic Update

As we close out a historical first quarter in 2020, we see the economic and financial data that illustrates the economic impacts of measures to mitigate the spread of Covid-19. Our partners at the National Bank Economics team offer a detailed review of many of these indicators in their recent April report.

Declining Oil Exports Will Slow Canada’s Covid Recovery

A recent economic forecast from RSM Canada sees Canada’s corona virus recovery evolving at a more modest pace than the U.S. In a recent article in Investment Executive Canada, RSM projects a ‘V’ shaped U.S. decline and bounce back as Canada is slower with a ‘U’ shaped, softer landing and slower climb out of recession. The difference is due to Canada’s export reliance, particularly in the oil and gas sector, which is also expected to decline significantly as a result of Covid-19. RSM argues that more fiscal stimulus is required as Canada’s current package amounts to 3% of GDP as the U.S. has offered 10% of GDP to date.

Residential Housing Market Will Be Impacted

Not surprisingly, according to the Canadian Real Estate Association (CREA), seasonally adjusted home sales fell 14.3% from February to March. The decline was broad based, with decreases reported in all 26 of the major markets surveyed. A National Post article echos the predictable change in what was a very robust real estate market.

Hampton Securities Advisors continue to keep you up-to-date and informed as we evolve through these challenging times. If you have any questions or concerns please feel free to contact us.

What is a Recession?

With the reduction in global economic activity due to the Corona virus (COVID-19), the reality of a recession is a common hot topic. The depth and breadth of a recession is dependent upon a number of factors. Our partners at National Bank Financial Economics offers a historical perspective.

“Will the ongoing coronavirus-related economic downturn also qualify as recession? We’ll have to wait some time to have an answer
from the CDHI. But if the March handoff is as bad as feared, we may get consecutive GDP contractions as early as Q1/Q2. Employment is likely to take a dive as well as businesses attempt to cut costs amid sinking revenues after operational shutdowns.”

National Bank Financial Economics, March 17th, 2020

Please contact your Hampton Securities Investment Advisor if you have any questions or concerns.

COVID-19 Update

Our partners at National Bank Financial Economics offer a week in review for the actions taken by the Central Bank to keep you informed and advised.

“This adjustment marks 100 basis points of easing provided by the Bank of Canada in less than 10 days—a record for the central bank. The unscheduled rate decision was classified as ‘a proactive measure taken in light of the negative shocks to Canada’s economy arising from the COVID-19 pandemic and the recent sharp drop in oil prices’. The Bank noted that “the coronavirus is having serious consequences for Canadian families, and for Canada’s economy.”

National Bank Financial March 13th, 2020

Recent fiscal and momentary strategies have been implemented by the Canadian government (Source: CTV March 18th, 2020). Watch the video here.

Please contact your Hampton Securities Investment Advisor if you have any questions or concerns.