Deloitte frames the stages of the current crisis as: Respond (when organizations need to react to the crisis), Recover (when actions are taken to make the organizations stronger), and Thrive (success in the post-pandemic world). We know that it is hard to get the mindset out of the current crisis, but we firmly believe that leaders need to think about all three of these dimensions at the same time. With that in mind, we have built a Recovery Dashboard. It tracks health outcomes, high frequency non-traditional data, financial series and economic indicators.
The most important statistics during a health crisis are obviously the health statistics that will show whether Canada and the rest of the world are succeeding at bending the curve. While it is important not to lose sight of key economic indicators, they won’t necessarily keep pace with the fast evolution of events since they are often lagged. That is why the second most important statistics we must track throughout this pandemic are high frequency non-traditional indicators – such as media sentiment, commercial traffic, foot traffic and the like. These are likely to signal the turning point before many financial and economic indicators, but the latter are still very important in assessing economic wellbeing.
You can access the dashboard at www.deloitte.ca/covid-dashboard
In other news, the latest data releases of Canadian vehicle sales and US weekly jobless claims provide clear evidence of the recession.
Canadian vehicle sales fell dramatically by 48 percent in March from their level in February. However, this covers a period before the economic lockdown came into full effect, meaning a further drop will come in the April.
US Jobless claims surged again, with 6.65 million Americans claiming insurance last week, double the record 3.31 million the prior week. This is consistent with the view that the US employment rate jumped into the double digits. However, employment data will come at a lag and the extent of the labour market weakness will only be partially reflected in next week’s employment report because the survey is done mid-month and missing the surge in jobless claims.
It looks like roughly 2.1 million Canadians have applied for EI over the past two weeks.
We have also received Canadian and US trade data, but this was for January, so not terribly relevant given the downturn that we know happened in March. Nevertheless, we are already seeing some evidence of the impact of the weakness in China. For example, Canadian exports rose in January by 0.5 percent, but exports to non-US countries were down 5.3 percent.
On the policy front, Prime Minister Trudeau’s daily press conference was dominated by questions about why the federal government has yet to release comprehensive national projections on the scale of the virus’ spread and how long it’ll be before the country is back on track to some sense of normality. Prime Minister Justin Trudeau said that information is coming “soon.”
One key piece of information missed in yesterday’s update is that the wage subsidy program could take three to six weeks to roll out. This is a long time for some businesses.
Meanwhile, provinces continue to roll out new initiatives to address the health and economic crisis. The top announcements today were:
An Alberta order to authorize the Alberta Petroleum Marketing Commission to borrow money to a maximum of $2.0 billion was approved. This allows APMC to purchase shares, make loans, enter into joint ventures or partnerships, provide indemnities or guarantees or incorporate or acquire one or more subsidiary corporations in respect of the development of a hydrocarbon pipeline project.
BC is providing relief on power bills during COVID-19, including relief for businesses. Small businesses that have been forced to close due to COVID-19 will have their power bills forgiven from April to June 2020. Major industries, like pulp and paper mills and mines, will have the opportunity to defer 50% of their bill payments for three months. BC Hydro rates were reduced on April 1, 2020, the first rate decrease in decades. The BC Provincial Supply Coordination Unit, in partnership with industry, has developed a made-in-B.C. online platform to co-ordinate, source and expedite medical supplies and personal protective equipment.
Craig Alexander is the first Chief Economist at Deloitte Canada. He has over twenty years of experience in the private sector as a senior executive and leading economist in applied economics and forecasting. He performed macroeconomic research, regional and sector analysis, and fiscal market forecasting and modelling. Craig is a passionate public speaker and holds a graduate degree in Economics from the University of Toronto.