ITR Experts Say

And the Rest of North America? Canada and Mexico Also Poised for 2021 Rebound

By Connor Lokar on February 18, 2021

Free Economic Updates

Back to main Blog
Connor Lokar

As a millennial, Connor brings a new perspective to the world of economics, delivering ITR’s industry-leading accuracy to current C-suite executives while forging connections with the next generation of business leaders.

What’s Happening

The US will not be the only North American economy to rebound in 2021; expect improving conditions in Canada and Mexico as well. Comparatively speaking, both the Canadian and Mexican economies fared a bit worse than the US in 2020. Mexico Industrial Production ended 2020 10.0% below the 2019 level, and Canada Industrial Production is projected to finish the year down roughly 8.5%. These compare somewhat unfavorably to US Industrial Production's 2020 exit of -6.9% compared to 2019.

What’s Coming

2021 will be a pleasant reversal from the negativity sustained during 2020, as we expect growth in all three North American economies. Through the most recent data, we have notched relevant positive ITR Checking Points™ for both the Canadian and Mexican economies. The quarterly growth rates for both countries have established statistically significant low points and more recently upward-passed the respective annual growth rates. These positive internal momentum markers indicate that recovery on a year-over-year basis is imminent for both economies, in line with our forecast expectations. In addition to the positive internal trends, external inputs are also indicating 2021 growth for both economies:

Rising Leading Indicators for Canada Rising Leading Indicators for Mexico
Canada Leading Indicator 1/12 rate-of-change NAFTA Leading Indicator 1/12 rate-of-change
Canada PMI 1/12 Mexico PMI 3/12
Canada Exports to the US 3/12 Mexico Light Vehicle Production 3/12
Canada Capacity Utilization Rate 1/12 Mexico Manufacturing Capacity Utilization Rate 3/12
Oil prices Mexico Total Exports 3/12


What’s Next?

Despite lingering COVID-19-related issues early this year, the data is abundantly clear that the North American economic engine is going to come roaring back to life in 2021. Prepare your business for higher activity in both Canada and Mexico in 2021 and prepare to start shifting sales and marketing resources to leverage this year's improving market conditions. Additionally, take the necessary operational steps to ensure that you have sufficient personnel and capacity, as well as a robust supply chain, to accommodate higher volume this year and next.


Connor Lokar

Senior Forecaster


The latest insights from our expert economists, delivered right to your inbox.