Tracking Canada’s economic recovery from COVID-19
- August 3, 2022
Export Development Canada (EDC) is keeping a close eye on how the pandemic is affecting Canadian companies and the global economy and has released its monthly Canadian Economic Recovery Tracker (CERT).
The CERT offers insights from a variety of indicators—available several weeks before official statistics are released. Here are the insights from the latest CERT:
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 These outbreaks and related concerns have been replaced by new risks, like inflation and lower growth prospects.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.
As of July 22, the CERT sits at pre-pandemic levels.
Since the June 22 CERT release, new weekly COVID-19 cases have increased with hospitalizations stable in Canada. Restrictions have significantly eased across the country and most public health mandates are now lifted. However, the new Omicron lineage has led to another wave of infections 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 is down since our last release. The Canadian price of oil (Western Canada Select) has retreated from highs earlier in the year and now sits at US$78 a barrel.
The transportation and mobility index has erased some of the progress since the last release. Although, restrictions have largely been removed and travel is resuming, mobility to transit stations and workplaces remains depressed. Freight activity has edged down from pre-pandemic levels. Flight activity has improved ahead of summer travel season, but hasn’t kept up the seasonally high pre-pandemic levels.
Business and consumer sentiments continue to deteriorate 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 less optimistic on the near-term environment.
Housing, spending and employment* are stable. Online job postings have slowed, but remain 65% above February 2020 levels. Hours worked have steadily increased and are 2% above February 2020 levels. As the Bank of Canada rapidly increases interest rates, housing market activity is slowing, which now sits at 12% below pre-pandemic levels. Mobility activity across retail and recreation centres remains above pre-pandemic levels.
*Note: The housing, spending and employment component formerly included a consumer spending series, which has been substituted with a targeted mobility index. The transportation and mobility index has been adjusted accordingly.