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Weekly Economic Letter
4
0
Vulnerability of Canadian manufacturers to exchange rate
Tue, Jun 23 2009, 07:19 GMT
by Economic and Strategy Team
Summary
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With a record quarterly depreciation of 14%, the USD/CAD exchange rate came to the rescue of Canadian manufacturers in 2008Q4.
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The situation has since turned around with an appreciation of about 10% over Q1. This is bad news for our manufacturers already operating under recession circumstances.
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By our simulations, nine industries accounting for 27% of Canadian manufacturing shipments are quite vulnerable to an exchange rate holding on average at US$0.88. The 13 other industries should maintain satisfactory profitability at the least, considering the circumstances.
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Luckily, our scenario calls for the global economy to turn the corner in the second half of 2009. Most Canadian manufacturers should be able to hang on until then.
Published on Tue, Jun 23 2009, 07:23 GMT
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Published On Tue, Oct 6 2009, 06:06 GMT
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