According to a recent private sector forecast, Canada’s economy is beginning to enter the recovery phase, with positive growth projected as soon as 2021.
A report released by the Conference Board of Canada suggests the Canadian economy may have already suffered through the worst of the coronavirus pandemic, with a projected contraction of 8.2% for the remainder of 2020. However, as long as a severe second wave of the virus can be averted, economic growth of 6.7% is viable in the following year, followed by a 4.8% increase in 2022.
Given the current economic projections, a “V” shaped economic recovery is most likely off the table, and instead a prolonged “U” shaped recovery paired with bumps and setbacks is becoming more evident. The Conference Board is anticipating an unemployment rate as high as 13.7% by the end of the second quarter, but an increase of approximately 300,000 jobs in the month of May coupled with the lifting of several restrictions in June should show signs that the worst has passed for Canada’s labour market.
If in fact a second wave of the deadly virus does ensue, then Canadian businesses will most likely be more prepared, and will already have safety measures in place such as plastic barriers, deep sanitization methods, and social distancing practices. As such, the Conference Board is predicting a further 1.3 million jobs becoming available in the third quarter, which would in turn decrease the unemployment rate to 10.5%.
Information for this briefing was found via Bloomberg, Global News, Statistics Canada, and the Conference Board of Canada. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.