Export Development Canada says trade confidence among Canadian exporters hit all-time low in its latest survey due to the economic shock as a result of the COVID-19 pandemic.
The export credit agency says its trade confidence index fell to 56.0 compared with 69.3 per cent at the end of 2019.
The economy plunged into recession earlier this year after public health restrictions forced the closure of non-essential businesses in a bid to slow the spread of the pandemic.
The survey, which is conducted twice a year, found that almost three-quarters of respondents said the pandemic has had a negative impact on their sales, with half of those reporting a “high negative” impact.
EDC noted that 14 per cent of businesses said they’ve seen stronger sales due to the pandemic.
Worries over increased protectionism, trade tensions
In addition to COVID-19, the survey suggested worries of increased protectionism, trade tensions and economic concerns also contributed to the declining confidence of the survey respondents.
“It’s not surprising that COVID is the culprit, but looking beyond the headline numbers, our survey’s details clearly show just how significant the pandemic and related containment measures have been for Canadian exporters,” said Stephen Tapp, EDC’s deputy chief economist.
The online survey conducted from May 6 to May 26 included responses from 823 Canadian exporters.
In a forecast released last week, EDC said it expects exports this year will fall 20.3 per cent due to the pandemic before rising 19 per cent next year.
The 2020 drop EDC is expected to include a 30 per cent plunge in automotive exports and a 33 per cent drop in the energy sector. Aerospace industry exports are forecast to fall 35 per cent.
Excluding the energy and auto sectors, exports are expected to be down 14 per cent this year.