Canada’s export outlook in 2022 | EDC

Assets related to industrial production are also hot. Mining exports are more than 40% above pre-pandemic levels, and chemicals and plastics exports are not far behind. Forest product shipments are also booming, driven by strong homebuilding activity in the United States and a global need for paper packaging, driven in part by the boom in door-to-door delivery and in part by the need for sustainable packaging. Also add consumer goods and agri-food exports to the list of winners.

Progress is, unfortunately, still “K-shaped”. The lower end of the “K” sees familiar industries. Lowest in the ranking is aerospace and other transportation equipment. Travel and tourism-related activities have a lot of potential, but are still very weak and also weigh on services exports. The outlook rests firmly on progress in managing the Omicron variant of the pandemic and country-by-country responses to new outbreaks.

Another prominent underground dweller is the automotive sector. Unlike travel, autos and parts are still down not because of demand, but because of persistent supply shortages. Semiconductors are the key issue, although major manufacturers have promised in recent weeks that supplies will rise earlier in the new year than expected. Demand for vehicles is still hot, and it is expected that when new vehicles become available again, pent-up demand will lead to an instant increase in sales in the United States. Of all the sectors, it is the one with probably the best short-term prospects and could well emerge from the basement of the penthouse in record time.

With the high flyers set to gain altitude and the stragglers ready to take off, it looks like there’s a lot more heat to add to the current scorching growth. Given that tight capacity has been a key feature of 2021, this year may see a long-awaited increase in investment as Canadian exporters prepare to meet real market demands.

The bottom line?

The new year is already marked by the big growth surprise that hit the global economy at the end of last year. This is evident in the latest released labor, price and capacity data, and it is clear in Canada’s recent and future business activity. This is no surprise from a fundamental perspective; they were still pointing to a big surge of activity. Unfortunately, economic fundamentals have been overshadowed – but not eradicated – by the pessimism produced by the pandemic. It is good to know that when sanitary conditions allow it, there is already an economy buzzing.

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