Canada’s economic recovery hinges on a return to work, consumer spending
Canada’s economy is recovering during the prolonged impacts of the COVID-19 pandemic, albeit slowly.
Ted Mallett, director of economic forecasting with the Conference Board of Canada, points to several positive signs and circumstances to the recovery.
For one, the economy has grown this year, about five per cent, however there is ground to make up, and that’s likely going to take until late 2022.
Consumers have cash — Mallett says household savings are five times more than what they were pre-COVID — but a lack of availability for services, travel, or even consumer goods, will keep the recovery at a slower pace.
Government income support programs are winding down, and a return to work should encourage more average economic buying trends, spurring consumers to spend that extra cash, he says, but global logistics of goods is still a long way from sorted.
World trade is like a well-orchestrated ballet, he says, and one that’s had a bunch of wrenches thrown into it. Sorting out that mess will take time.
Plus, shortages and uncertainty have increased the cost of some goods, which may deter some consumer spending, but Mallett sees prices settling in the next year to 18 months.