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Vaccine key to recovery, economist tells Sudbury audience  

Pierre Cleroux, VP of research and chief economist at BDC, speaks to chamber of commerce

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The Canadian economic recovery is well underway, but COVID-19 did deliver a robust punch.

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Pierre Cleroux, VP of research and chief economist at BDC, said Thursday Canada has recovered most of the jobs lost in February. But that hit was deep — across the country, three million jobs were lost when COVID-19 swept ashore.

“Since the economy reopened at the beginning of the summer, a large number of jobs have been created,” he said. “Eighty per cent of jobs lost have been recreated since the end of the lockdown. Today we’re still below the level of jobs in February, but we are at 97 per cent of the level we were at in February.” 

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Cleroux was speaking to a local audience Thursday at the invitation of the Greater Sudbury Chamber of Commerce. It was the chamber’s annual economic outlook presentation. 

As Cleroux pointed out, China will be the only country to have positive growth in 2020; all other countries are in the red due to the pandemic. He attributed China’s success to its large manufacturing sector. 

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“China’s growth will be positive, but smaller than what we have seen in the past,” he told the audience. “All the major economies — United States, Japan, Canada, Germany — all these countries are going to have a contraction this year of about five per cent.”

Other countries in Europe and elsewhere, including the United Kingdom, France, Italy and Mexico, are forecasting a contraction of up to 10 per cent, Cleroux said. The pandemic has deeply disrupted the global economy.

But there is good news. World trade is bouncing back quickly, much more quickly than during the previous recession.

“It means countries are going to rebound faster,” Cleroux said. “The biggest concern we have at the world level is that some countries are having big second and third waves, depending on the country. These major economies — the United States, France, the UK — are really having a large number of cases, which is delaying their recovery.”

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The United States has only recovered 54 per cent of jobs lost due to COVID-19, which will significantly impact the world outlook. Cleroux said he is forecasting negative global growth of 4.2 per cent in 2020, but there will be a “significant rebound for the next two years.”

Canada has rebounded well and Cleroux said in Ontario, there are actually more people working in manufacturing now than in pre-COVID days. His statistics show the province is at 102 per cent the number of manufacturing jobs it held in February.

“Some sectors are coming back very quickly,” he said.

Other industries, however, including hospitality and food service, have not fared as well. He said it will take more time for those sectors to rebound, but he said he felt confident they would recover.

Cleroux said under the most optimistic forecasts, the economy will return to its pre-COVID state by the end of 2021 or start of 2022 — as long as a vaccine is in place and readily available. 

“If we cannot control the second wave, however, or we have a third wave after Christmas — a lot of experts are afraid of that — and for some reason the vaccine is delayed, the full recovery will be delayed, up to 2022,” he said. “Today, we are quite optimistic.”

mkkeown@postmedia.com
Twitter: @marykkeown
705 674 5271 ext. 505235

 

 

 

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