As energy industries slowed, others were supposed to take over. Economists expected that a weaker Canadian dollar would boost demand for manufactured goods, especially from the United States. That has not happened. Exports to Canada’s southern neighbour, including oil, were 6.5% lower in May than during the same month last year. Manufacturing output shrank in April for the fourth consecutive month.
Partly as a result, private investment is falling. Energy firms, which account for around a third of capital spending, are expected to slash investment by nearly 40% this year. This is just the first wave of cuts, warns Jock Finlayson of the Business Council of British Columbia.