A disappointing jobs report from Statistics Canada is grabbing more headlines Friday morning, but a separate report from the federal agency may provide some comfort to those concerned about the economy.
Trade data out today shows that – at long last— the very thing that is being banked on to keep Canada afloat through the current resource downturn is finally making an appearance. Exports.
“Non-energy exports are supposed to be the saviour for the Canadian economy, and December’s data gave hope to the faithful,” Nick Exarhos, economist at CIBC, said.
Ten out of 11 export sectors tracked by Statscan reported gains – some, like consumer goods, autos and machinery, posting double-digit jumps compared to the same month a year earlier.
Way back then, the loonie was hovering around 85 cents U.S. (see chart below), an exchange rate that provided some discount on Canadian-made stuff for buyers paying in U.S. dollars, but not one big enough to cause a dramatic change in the sector’s fortunes.
Since then, the Canadian dollar has fallen nearly 20 per cent more and has settled into a range that appears to be attracting a flood of orders from U.S. and foreign buyers.
“December’s trade report is certainly a positive for the Canadian economy,” Dina Ignjatovic, economist at TD Bank, said.
Ignjatovic said the loonie is likely to remain around 70 U.S. cents for some time.
“This will help to shift the economy toward non-resource, export-led growth and facilitate the adjustment in the Canadian economy to the new commodity price environment.”