Kuala Lumpur, Malaysia. (Fakrul Jamil/Getty)
Tuesday’s Statistics Canada release confirmed that Canada did indeed experience a recession during the first half of the year. The energy sector was certainly hard hit by the sharp drop in oil prices. And the manufacturing of durables—including fabricated metals, transportation, and machinery—has also suffered. But it seems no one told the services sector about the slowdown. Some 70% of Canada’s economy is in services, and this sector has been growing, not shrinking. (See chart below.) This is consistent with our recent research, which has shown that services generally offer greater stability throughout the ups and downs of business cycles.
Though less visible than manufactured goods and natural resources, our new research shows that Canadian companies are increasingly selling their engineering, computer, insurance, and other high-value services in global markets. And the high-value services we sell support high-paying jobs. The potential to grow this seems limitless; services are the most dynamic part of global trade and represent fast-growing and significant demand across most world regions and high-value business services sectors.
Many Canadian businesses are well aware of this potential and have been taking advantage of growing global demand. Now we can all see another benefit of expanding our services abroad—greater economic stability.
Danielle Goldfarb is Associate Director of the Conference Board of Canada’s Global Commerce Centre. Jacqueline Palladini is Senior Economist of the Global Commerce Centre.
This blog post originally appeared at the Conference Board of Canada.
MORE ABOUT INTERNATIONAL TRADE & INNOVATION:
- CETA could be huge for Canada—if companies are ready to adapt
- Newfoundland is holding the Canada-Europe free-trade talks hostage
- Canada’s big opportunity in China is services, not just resources
- The real opportunities in China today are found farther inland
- Trading in renminbi is only the start of expanded Canada-China trade
