MNI INTERVIEW: Canada Ivey PMI Chief Sees No Recovery Soon

--Canada Index At Another Record Low In April

By Greg Quinn

     OTTAWA (MNI) - Canada's economy won't see a rebound anytime soon because of

widespread damage to trade from Covid-19, the head of the Ivey Purchasing

Managers Index told MNI after it fell to a record low 22.8 in April from 26 in

March and 54.1 in February. 

     "It's going to be a while before we start to see it above 50," said Fraser

Johnson, who compiles the index and teaches courses in supply chain management

and operations at the Ivey business school at Ontario's Western University. "I

don't think we are going to see a V-shaped recovery."

     Two-way trade is being disrupted as local companies struggle to produce and

ship goods, while shutdowns in the U.S., China and Europe crimp imports, he said

in an interview on Thursday. Food production and health products are among the

industries under the most pressure, Johnson said.

     The index is one of the first looks at Canada's economy through the start

of the second quarter, a time when health shutdowns may shrink GDP the most

since the Great Depression. Every component except for the price measure was

well below 50. Figures less than 50 signal a contraction, and the prior record

low in data back to 2000 was 42.1 during the 2008-2009 recession. 

     "The economy continues to decline at a very steep rate," he said. "It's

right across every sector and every geographic region." 

     --CONSUMER SETBACKS

     One key to recovery is discretionary consumer products, which may have been

set back further than services and the public sector, he said. 

     Resilience in prices also may discourage some families, because it reflects

higher food costs while falling gasoline prices are less visible to people

forced to stay at home.

     Rebuilding supply chains will be more difficult given health concerns

around travel to far-flung work sites. "Companies are going to have to put their

consultants back on the road, so are you going to want to jump on a plane to the

U.S. and stay in a hotel?"

--MNI Ottawa Bureau; +1 613-314-9647; email: greg.quinn@marketnews.com

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