Canada’s exporters ended the year in a ho-hum mood. That’s maybe an achievement in a year filled with freak-out factors. What’s disappointing is that this latest movement in EDCs Trade Confidence Index erased the mid-year surge, which occurred in spite of the worries that North American free trade might be a thing of the past. Given that we now have a CUSMA agreement, the late-year retreat of the Index is a setback. What do we make of this latest development?
Global conditions are a big downer
First, let’s not get too discouraged. The Index did slide, but only down to its historical average. That means exporters are on balance upbeat, just not as much as in the middle of the year. True, all five Index elements fell, but it was the near-term perception of world economic conditions that took the biggest hit. In fact, this Index element is at its lowest level since the oil price shock in early 2015. Expectations for actual sales paint a very different picture. While down in the recent survey, the percentage of Canadian exporters expecting sales to rise over the coming six months is still at its second-highest level in the post-recession period – by a considerable margin...
This was excerpted from an 18 December 2018 commentary by Peter Hall, Vice-President and Chief Economist, Export Development Canada.