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MNI INTERVIEW: Bellwether Canada Exporters Are Gloomy Again


Sentiment among exporters in Canada -- one of the most trade-dependent industrialized economies -- is dropping back to the lowest since Covid or the global financial crisis, the chief economist of the country's trade finance bank told MNI.

Business leaders see rapid inflation persisting through 2023, dangers to global trade from war in Ukraine, and the potential for a global recession, according to Stuart Bergman at Export Development Canada.

Firms across almost every industry are reporting more negative conditions, suggesting exports won't pull Canada out of a slump at a time when higher interest rates are shrinking domestic demand, he said. Many firms also see the global economy on the edge of a recession.

“We’re pretty darn close, as close as you can get” to a recession, Bergman said in an interview Friday. “Exporters are expecting weak, below-trend, uninspired growth coming out of certain key markets” like the United States.

EDC's semi-annual Trade Confidence Index released Friday fell to 63.8 from 69.1, the third straight decline. The only lower result was around the collapse of Lehman Brothers and the worst of the Covid pandemic, in records back to 1999. Half of firms are concerned about a global recession in the next six months.


Persistent inflation remains a top concern even after aggressive rate hikes by the Federal Reserve and Bank of Canada. Fifty-five percent of the about 800 firms surveyed say inflation will be a problem for more than a year, though that's down 12 points from the last report.

Some firms see profit margins being squeezed as consumers run down the extra cash built up through pandemic relief checks, giving them less scope to raise prices, Bergman said.

Volatility is another problem, Bergman said, with firms rattled by the Ukraine war, frayed supply chains and trouble finding skilled workers. With Canada's latest quarterly GDP report showing strength in exports while domestic demand shrank, there may be little left in the economy's tank next year.

“More and more Canada’s economy is going to be relying on trade, and the concern is that the results of the trade confidence index aren’t giving us a whole lot of optimism.”

The results may lead EDC to mark down its view the economy still had a fairly good path away from a recession, Bergman suggested. (See: MNI PODCAST: FedSpeak- World Skirting Recession)

MNI Ottawa Bureau | +1 613-314-9647 |
MNI Ottawa Bureau | +1 613-314-9647 |

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