Export Development Canada responds to gloomy outlook
Some economists are calling for a slowdown in some global economies and possibly a recession; but how will Canadian businesses fare?
Global outlooks are based on industry in the US and Europe operating at full capacity and simply the fact that it’s been a while since we last had a recession.
But Economic Development Canada, the crown agency focused on helping Canadian businesses grow internationally, says that it believes things are looking good for Canadian businesses.
In its biannual Global Economic Outlook, EDC says that increased investment and growth in key markets means opportunity for Canadian exporters.
Its view of industry operating at maximum capacity is that it can mean increased investment is ahead, and Peter Hall, the EDC’s vice president and chief economist says there is another element to remember.
"One often forgotten factor is the clear presence of pent-up demand," says Hall. "Various measures strongly suggest that in both the US and Western Europe, the housing, non-residential construction and consumer sectors have not yet fully recovered, and indeed have a long way to go before conditions are fully normalized."
While consumer spending is likely to ease due to rising interest rates, it sees government spending offsetting this to allow for modest economic growth of 2% this year and next.
Although the agency says that NAFTA needs to be finalized before it gets stuck in an election cycle, it does not see a major impact on Canadian or US economies at this point, although Mexico is likely to see moderately lower growth.
