Back in the Black? Yes and No

(Export Development Canada – Peter G. Hall)

There’s nothing like a little growth to pick up the spirits. Many indicators are pointing north again, and sentiment is noticeably brighter – in part, out of relief that the worst is behind us, but also reflecting a broadly-based rebirth of hope. Following a tough 2009, Canada will see the return of growth this year.

For Canadian exporters, calling 2009 a tough year is a gross understatement. The collapse of global trade and the resulting plunge in commodity prices lopped a shocking 24% from total exports. Not only was 2009 the worst year on recent record, but the decline was a stunning six times deeper than the weakest year going back to 1961. Worse still, exports began 2009 on the heels of a 5% drop in price-adjusted trade in 2008 – the trade sector was already in recession before last year’s carnage. There is some solace in the fact than on balance, Canada fared no worse than the rest of the world.

EDC’s Winter 2010 Global Export Forecast predicts that the world will begin to rise out of the chasm of recession this year. Following a deep 1.2% pan-global decline last year, GDP is expected to rise by 3.2% in 2010. Developed economies will together post 1.8% growth, while emerging markets rise by a collective 4.8%. Canada is expected to outpace average growth for the industrialized world for the second year in a row, with an economy-wide increase of 2.1%. Growth in international exports will outpace GDP growth marginally at 3%, and if price increases are included, by 5% overall.

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