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Retail Savings & Investments in Canada: Coronavirus (COVID-19) Sector Impact
The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.
Fears surrounding the impact of COVID-19 have already significantly impacted the global economy, with key markets across the globe losing 20-50% of their value for the year to date. Many economists and institutions have cut their forecasts, with consensus global GDP growth currently at 2.6% for 2020 and many experts predicting the potential onset of recessionary environments.
A similar trend is expected in Canada, as economic growth in the country is expected to have dipped in the first quarter of 2020 and will decelerate further if the disease is not controlled at the earliest possible opportunity. The decline will have an adverse impact on all sectors, including banking and payments.
This report focuses on the impact of the coronavirus outbreak on the Canadian economy and the country's retail savings and investment market. It also highlights the measures adopted by the government to combat COVID-19. Based on our proprietary datasets, the snap shot contrasts GlobalData's pre-COVID-19 forecasts and revised forecasts of total retail bond, deposits, equities and mutual funds holdings in terms of value and growth rates. It also analyses the effects on HNW wealth, examining the importance of different industries as a contributor to HNW wealth.
- COVID-19 is expected to reduce Canadian retail investments by 7.3% from the previous 2020 forecast as the large role of mutual funds takes a bite out of the country's collective savings.
- Both bonds and deposits are forecast to have strong years as a flight to safety during the crisis and recession see Canadians devote more of their savings to these assets. The household savings rate is expected to increase as Canadians seek to weather the crisis and recession. Fortunately, households will be aided by direct support from the government, which should prevent Canadians from having to dip into long-term savings to support short-term consumption.
- A strong recovery in equity and mutual fund holdings is expected in 2021 after a dismal 2020.
- The large energy sector centered in Alberta will be an acute source of weakness in the Canadian market, with the sector previously the top generator of high-net-worth (HNW) investors in Canada. A strong and early recovery of the oil price is the greatest predictor of whether this will remain the leading source of new HNW customers in Canada.
- Healthcare, finance, and technology are all major sectors for HNW wealth creation, and all should perform relatively strongly in 2020 and 2021.
Reasons to Buy
- Make strategic decisions using top-level revised forecast data on the Canadian retail savings and investments industry.
- Understand the key market trends, challenges, and opportunities in the Canadian retail savings and investments industry.
- Receive a comprehensive insight into the retail liquid asset holdings in Canada, including deposits, mutual funds, equities, and bonds.