When the Canadian dollar reached parity with the American greenback earlier this month, it sparked widespread concern that Canada’s exports would face a tougher time selling to foreign markets. With the stronger dollar came the impression that the increased cost of Canadian goods would make them a harder sell. However, Stefania Moretti of QMI Agency reports today that the opposite may be true.
According to her latest article on The Toronto Sun website, “goods and services will surge by 11% this year but earnings will still fall short of levels seen 10 years ago, according to Export Development Canada’s latest forecast.” The report insists that the global economy, Canada included, is not yet in recovery, but instead is in a “critical zone” that is on its way back to prosperity.
In his report, EDC Chief Economist Peter Hall exclaimed that “If recovery means a return to a reasonable level of economic activity, then multiple indicators suggest we are still well shy of the mark.” Even still, the EDC predicts that the global economy will experience a rise of 3.7% in 2010, which is a significant improvement from the 1.9% contraction of last year. A 4.2% expansion is expected for next year as well.
According to Hall, one of the reason’s that Canadian exports will rebound by 11% is the increased demand for goods from the United States. In addition, while not many economists agree with him, Hall also believes that the loonie will fall below parity by as much as 10 cents by the end of 2010.
Speaking a to a group representing Ontario’s recession-hit manufacturing sector at Toronto’s Sutton Place Hotel earlier today, Hall remarked that, “the dollar has been eating away at bottom lines in this province.” Evidently, the loonie’s rise to parity is not helping Canadian exporters beat the recession.
Nevertheless, Moretti reveals that Canada’s fertilizer, forestry, energy and metals sectors are all expected to post strong gains in 2010 helping to pave the way for recovery. She writes: “Energy exporting provinces will come in above the national average thanks to higher prices. New Brunswick, Alberta, Ontario, British Columbia and Newfoundland and Labrador will all see growth of between 18% and 14% over the next 12 months, the EDC estimates.”
Clearly, Canada’s ability to export its goods and services will weigh heavily in the nation’s recovery process. It goes without saying that Canadians, along with the rest of the world, have had enough of the world’s economic crisis. For most everyday citizens, a return to a strong financial status means the creation of more job opportunities.
As usual, the Synergy Merchant Services Blog will keep watch of the nation’s economic recovery. We share the hopes of all Canadians as we look forward to a prosperous financial future for the nation.