EDC’s Canadian Economic Recovery Tracker highlights key trends in Canada’s economic performance.
In these challenging times, Export Development Canada (EDC) is keeping a close eye on how the pandemic is affecting Canadian companies and the global economy. To help you monitor overall progress, our monthly Canadian Economic Recovery Tracker (CERT) offers timely insights from a variety of indicators—available several weeks before official statistics are released. For more information on the CERT methodology, click here.
Canada’s recovery reverses course and drops below pre-pandemic levels
Following the initial plunge in economic activity back in spring 2020, Canadian businesses and consumers appear to have adjusted their operations and habits with each successive wave of COVID-19 cases. These outbreaks and related concerns have been replaced by new risks, like inflation and lower growth prospects. Canadians are still experiencing the effects of prolonged supply chain issues and tighter monetary policy.
As of Aug. 19, the CERT sits at 2% below pre-pandemic levels.
Financial markets are dragging down the overall recovery as oil prices retreat and uncertainty around future growth becomes more probable.
Since the July 22 CERT release, new weekly COVID-19 cases continue to trend upwards with hospitalizations stable in Canada. Restrictions have significantly eased across the country and most public health mandates are now lifted. However, the Omicron variant has led to a higher rate of infection across the country.
Financial markets continue to be extremely volatile amid the Russia-Ukraine war and tightening monetary policy in response to record inflation. The TSX moved higher since our last release. The Canadian price of oil (Western Canada Select) has declined and continues the comedown from the highs earlier in the year. The WCS price now sits at US$69 a barrel.
The transportation and mobility index remains stable. Although, restrictions have largely been removed and travel is resuming, mobility to transit stations and workplaces remains depressed. Freight activity has improved slightly, but remains below pre-pandemic levels. Flight activity experienced a huge influx of demand during the summer months, but is now softening—still below seasonally high pre-pandemic levels.
Business and consumer sentiments remain low as monetary policy tightens at a much quicker pace and geopolitical tensions remain high. Inflation continues to exceed normal levels and short-term global growth prospects are lower. More specifically, consumers are showing increased confidence since the last release, but are still less optimistic on the near-term environment.
Housing, spending and employment* are stable. Online job postings continue to slow, but remain 63% above February 2020 levels. Hours worked have seesawed and are 1% above February 2020 levels. As the Bank of Canada rapidly increases interest rates, housing market activity is slowing, which now sits at 17% below pre-pandemic levels. Mobility activity across retail and recreation centres remains above pre-pandemic levels.