All major Canadian exports including energy, autos, agriculture, forest products and machinery-and-equipment collapsed in the latest report. Canadian analysts are shocked by the news.
I sure am not.
For my reason, look at happenings in China, a huge recession in Europe, and even a recession in the US that surprisingly few have even figured out yet.
The Globe and Mail reports Sharp trade slowdown set to wallop GDP
The high dollar and the global slowdown are crushing Canada’s trade-dependent economy.
The latest evidence: The country posted the largest trade deficit in July since Statistics Canada began keeping records in 1971.
It wasn’t just the scale of the gap – $2.3-billion – that jolted analysts. It’s how the economy got there.
Virtually all major exports fell sharply, including energy, autos, agriculture, forest products and machinery-and-equipment. The overall drop was 3.4 per cent, paced by an even larger 5 per cent decline in exports to the U.S. – Canada’s largest customer.
At $2.3-billion, the trade deficit narrowly eclipsed the old mark, set in September 2010.
Scotiabank’s Mr. Holt said the high dollar is most damaging to U.S.-bound exports, which accounted for 72 per cent of all exports in July.
Global Recession RevisitedUS Recession Factor
On July 6, 2012, I wrote Plunging New Orders Suggest Global Recession Has Arrived
Clearly I am not changing that prognosis although I do wish to reiterate the definition of "global recession as per my post Case for US and Global Recession Right Here, Right Now; Recognizing the Limits of Madness; Permabears?