P.E.I. manufacturing faring relatively well in pandemic, for now
April numbers need to be viewed with caution, says economist
Manufacturing sales numbers for April were released by Statistics Canada this week, and they show P.E.I. is performing well relative to the rest of the country in the COVID-19 pandemic — but there are signs of trouble ahead.
Seasonally adjusted, from February to April, P.E.I sales were down 17 per cent, as compared to 36 per cent nationally. Measuring the year to date, a strong first quarter kept P.E.I. well into positive territory, up 9 per cent, while Canada's numbers were down 13 per cent.
Fred Bergman, senior analyst with the Atlantic Provinces Economic Council, said the difference can be partly explained by declines in the automobile and petroleum sectors. These had a big impact on Canada as a whole, and virtually none on P.E.I.
P.E.I. kept its numbers up mostly with non-durable goods, which saw only a slight decline February to April. Confidentiality issues prevent Statistics Canada from publishing some of the fine details, but you can get a sense of them from export numbers.
"There were gains in french fries, gains in potato exports, lobsters, medicaments, which is medicine, while aerospace exports are down," said Bergman.
Some of those results are surprising in themselves, and others are cause for worry in the future.
Fishing industry challenged
With restaurants closed, demand for french fries has dropped and yet sales are up.
"Maybe somebody had locked-in sales, maybe they had contracts they couldn't get out of right away. They had commitments to buy a certain amount, so those sales will still take place," said Bergman.
But that is unlikely to last, he said.
French fry manufacturer Cavendish Farms told CBC News that it saw a decrease in shipments to customers in April.
Also of concern is the increase in lobster sales. The seasonally-adjusted figures will take into account a big increase in lobster sales that typically happens in May, but that industry is facing two challenges.
One, the fishing season usually starts at the beginning of May, but the pandemic delayed it two weeks this year. Two, prices are down as much as 50 per cent compared to last year, said Bergman. As with french fries, demand is lower with restaurants closed. Because the sales are measured in dollars, that will also have a big impact.
Full impact yet to be seen
Aerospace exports, a durable good, are likely to remain low for years, said Bergman, as the industry waits for people to start travelling again.
The one bright spot that Bergman expects will continue to shine is medicaments.
"Some of that is related to COVID-19 vaccine research or test kits possibly," he said. "I've seen some examples of at least one P.E.I. firm involved in that industry."
In all, Bergman cautions reading too much into the April data.
The full impact of the pandemic may be yet to be felt in many sectors.