OTTAWA, ON--Canadian exporters and investors are feeling somewhat bullish about future prospects, according to a semi-annual survey of Canadian companies released today by Export Development Canada (EDC).
The overall increase in the Trade Confidence Index (TCI) was primarily impacted by a majority of respondents who indicated that they believed global economic conditions would improve over the next six months, suggesting that looming reductions or expirations of U.S. and European government stimulus programs were not dampening international trade, said the EDC in a release.
“Back-to-back increases in trade confidence haven't happened since the deluge of government spending hit the world economy in 2009," said Peter Hall, Chief Economist, EDC. "What’s compelling about this is that there's a simultaneous echo of optimism around the world, including consumers and businesses in the U.S. and Europe, and broadly across Japanese industry.”
Hall added that “a simultaneous rise in global business confidence bodes well for Canadian exporters. Business may well get caught ham-handed, as they have been in go-slow mode for years. Capacity is tightening, creating an acute need for new investment. We may well be looking at a moment when companies around the world start ramping up production to keep up with demand.”
The TCI, which serves as a pulse check of Canadian exporter and investor confidence and their projections around business opportunities in the next six months, moved up 2.8 points to 75.4 in fall of 2013. The increase came on the heels of a 1.9 point increase in the spring of 2013, when the TCI hit 72.6 (up from 70.7 in the fall of 2012).
The following is a summary of some top line survey results:
• A growing majority of respondents expect export sales to increase in the coming six months. The proportion of those expecting higher sales edged up to 55 per cent, the strongest positive reading among the five TCI elements.
• Exporters are also more bullish about international business opportunities, with 34 per cent of respondents expecting better opportunities over the next six months (up from 27 per cent in the spring).
• Orders from the U.S. also continued to increase in fall 2013: 40 per cent of respondents reported that orders from U.S. customers have increased in the past six months, rising from 35 per cent in the spring.
• Respondents are continuing to diversify their markets, with 35 per cent saying they had begun exporting to new countries during the past two years. Half of all respondents said they plan to expand into new countries over the next two years.
• While almost a third of respondents expect to increase hiring over the next six months, 73 per cent anticipate difficulty in hiring the skilled labor that they need to grow and compete.
The TCI survey was conducted in late September to early October, 2013. A total of 1,000 Canadian businesses participated, and the TCI was calculated on a total of 769 respondents.