One bright spot in somber StatsCan data

Industrial prices seem to have ticked up in May, representing a bright spot in 2020 amid an array of gloomy new economic data from Statistics Canada.

A new so-called “flash” estimate from StatsCan indicates that its Industrial Product Price Index (IPPI) recorded its first increase for 2020 last month: the IPPI for May rose by 1.2% month-over-month.

An increase in meat prices led the way, after the pandemic led to closures that reduced supply.

Refined energy product prices also contributed to the increase, StatsCan said, as that component increased 9.4%.

Amid the huge economic disruption caused by Covid-19, StatsCan has begun providing ‘flash’ estimates of certain indicators in an effort to give early insight into the economic effects of the outbreak. These readings are subject to revision, with the final IPPI released on June 29.

In the meantime, assorted other data releases from the national statistical agency provided more insight into the depth of the downturn.

For example, it reported that motor vehicle sales plunged by 74.6% in April, following a 48.5% drop in March.

These back-to-back declines were the two largest on record, StatsCan said.

The forced closure of new car dealers due to the pandemic drove the decline in sales, which were limited to online purchases from mid-March and throughout April.

StatsCan also reported that overall retail sales declined by 10.9% in March to $43.4 billion — again due to the effects of Covid-19.

The drop in vehicle sales led the decline in retail sales, StatsCan noted, adding that lower sales were reported in 12 of 19 product categories.

Retail food sales, on the other hand, posted a 19.5% sales increase in March, as more households cooked at home due to the pandemic.

Additionally, StatsCan reported that alcohol sales rose by 10.4% in March and that sales of cannabis products were up 197.1% from the same month last year.

Household hoarding also drove higher demand for certain products, including toilet paper, paper towel, and batteries.

Finally, StatsCan reported that industrial capacity utilization rates declined in the first quarter, led by the manufacturing sector.

“Canadian industries operated at 79.8% of their capacity in the first quarter, down from 81.4% in the previous quarter,” it said.

“This was the third consecutive quarterly decline and was because of the slowdown in most sectors caused by physical distancing measures implemented in response to the Covid-19 pandemic,” the agency noted.