Canadian exporters anxious
Two-thirds of the exporters affected by the pandemic expect that its impact will carry forward into 2021
By ATB Economics 29 June 2020 1 min read
According to Export Development Canada’s latest survey, trade confidence among Canada’s exporters has hit a record low. The fallout from the pandemic pushed the export credit agency’s Trade Confidence Index (TCI) down from 69 at the end of 2019 to just 56 as of May.
Stephen Tapp, Deputy Chief Economist at Export Development Canada, says that “the decline was broad-based, hitting all five TCI components, all sectors of Canada’s economy, and all regions of the country.”
The overall impact of the pandemic on exporters has been negative, with 73 per cent indicating that it has hurt sales. Despite this, over 1 in 10 respondents (14 per cent) reported that the pandemic has had a positive impact on their sales (12 per cent said they are yet to see an impact).
Two-thirds of the exporters affected by the pandemic expect that its impact will carry forward into 2021.
The rise of protectionist sentiment and its corrosive effects on economic growth may have been accelerated by the pandemic. This, along with ongoing trade tensions between the U.S. and China, between Canada and China, and between the United Kingdom and the European Union in the form of Brexit, likely contributed to the 32-point rise in the proportion of exporters who expect protectionism to increase in the year ahead to 69 per cent.
Whether to address this challenge or simply to grow their business, 69 per cent of the survey respondents plan to export to new countries in the next two years—up 23 points since the end of 2019.
The survey results highlight that exporters in Alberta, Canada and around the world will have to not only deal with the hangover from the economic measures aimed at containing COVID-19, but also a trading environment that has lost some of its faith in the value of open trade, global supply chains and international partnerships.