Despite the massive upheaval caused by the pandemic, global trade bounced back faster than expected. China and the rest of emerging Asia, who suffered the first infections and lockdowns, have led the way back. But we’ve also seen sharp pickups in North America and Europe.
Canada’s trade performance has been remarkably resilient, too. Exporters were understandably quite pessimistic during the depths of the COVID-19 lockdowns in May, when EDC’s survey of trade confidence hit an all-time low. But business and consumer confidence has since improved as equity markets sprang back quickly and spending surprised on the upside.
After lockdowns eased, Canada’s goods trade defied the odds, tracing out a robust V-shaped recovery within a few months. The jolt was most obvious from restarting auto plants, which were making up for lost time and meeting unexpectedly-strong demand for new vehicles. But it wasn’t only autos. Our upward forecast revisions for 2020 were relatively broad-based, and largest for agriculture and forestry.
By the end of the summer, five of 11 export sectors were operating above pre-COVID-19 levels of activity (agriculture; forestry; mining; consumer goods and autos). At the other end of the spectrum, energy and aerospace continue to struggle through what will be multi-year adjustments...
This was excerpted from a 29 October 2020 commentary by Peter G. Hall, Vice-President and Chief Economist, Export Development Canada.