Canadian exports are expected to face steep declines in 2020, led by the aerospace, automotive and energy sectors. Forecasts for 2021 show rebounds across industries, but while some will return to pre-COVID-19 levels by the end of next year, others won’t see the same gains any time soon.
The impact of the novel coronavirus on Canada’s 2020 exports are expected to fall into three buckets, according to Export Development Canada (EDC): bad, worse and terrible.
“We are in historically unprecedented territory at the moment, both in terms of the collapse and the rebound,” said Peter Hall, chief economist at EDC and author of the organization’s latest report on Canada’s export forecasts. “This is just the kind of economic event that defies description.”
Overall exports are expected to fall 20.3 per cent from last year, according to the latest report, compared with a 2.6-per-cent growth predicted in October, 2019. The EDC predicts we’ll see a rebound of 19 per cent in 2021, although only a cluster of industries, including agri-food, chemicals and plastics, and consumer goods, are expected to return to prepandemic levels by the end of 2021.
But even industries that are faring better than others are posting what would have been shocking figures before the pandemic.
“It doesn’t matter what industry you’re in, [the pandemic] is impacting you very negatively,” Mr. Hall said. “The worst industry that anybody would have expected would have had the numbers that we’re now posting for the best industries.”
The industries hit hardest by the pandemic include aerospace, oil, autos and travel services, while the ones weathering the storm the best include agriculture, consumer goods, ores and metals, and chemicals and plastics, according to the report.
Shannon Coombs, president of the Canadian Consumer Specialty Products Association, says that she believes the consumer-goods industry has fared better than others because of the demand for products such as disinfectants, hand sanitizer and other general-purpose cleaners during the pandemic.
Consumer goods, according to EDC’s forecasts, will see a 9-per-cent decline in exports in 2020, followed by a 10-per-cent increase next year.
The demand for everyday items continues to grow because people are spending more time at home, Ms. Coombs said, meaning that they’re using, and buying, more household products than they would have otherwise.
Agri-food, despite some disruptions due to the coronavirus, will also fare decently, with only a single-digit decline of 8 per cent this year, followed by a 6-per-cent increase in 2021. Last year saw a 1-per-cent increase in exports compared with the previous year.
Mary Robinson, president of the Canadian Federation of Agriculture, says agriculture may fare better than some of its counterparts in exports because the industry is responsible for feeding Canadians and consumers globally.
“While Canada and the world focus on getting COVID-19 under control, people continue to need to eat food every day,” Ms. Robinson said.
Agriculture, as an essential industry, has also been allowed to remain operational throughout the pandemic while other sectors have had to partly close or completely shut down.
“Canadian farmers and supporting industries have demonstrated the ability to respond and adapt in times of crisis and disruption,” said Mitch Rezansoff, executive director of the Canadian Association of Agri-Retailers.
Sectors such as oil, aerospace and tourism will face a much longer haul, said EDC’s Mr. Hall, who added that he doesn’t expect oil and gas to return to normal until 2024 or 2025, when factoring in the effects of the pandemic, as well as the surplus supply in the industry. Aerospace and tourism will also need time to recover from the devastating year, Mr. Hall said.
But EDC’s forecasts point out that given rapidly changing global events, there’s a much higher-than-usual degree of uncertainty around the latest forecast. Factors such as new data, policy announcements and COVID-19 infection rates (not to mention the possibility of a devastating second wave) are all factors that could upend current predictions.
“Any forecasting outfit that is not in perpetual forecasting mode right now really runs the risk of not keeping up with current developments,” Mr. Hall said.
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