Exporter confidence retreated from its spring rebound amid renewed concerns about the global economy and Europe’s fiscal struggles, according to a semi-annual survey released of Canadian exporters and investors by Export Development Canada (EDC). However, despite the concerns, most Canadian companies have a positive outlook about their domestic and international sales over the next six months. Nine out of ten Canadian companies surveyed believed that their domestic and international sales will increase or remain the same throughout the winter.
"Since the fall of 2009, bullish exporter sentiment in the spring has given way to pessimism in the fall every year," said Peter Hall, Chief Economist, EDC. "This movement is not surprising given the mid-year softening that has occurred in each of the last three years. Volatility is also likely a by-product of global pessimism, which has prompted quick overreactions to negative developments."
"Given the pitiful state of global confidence, Canadian exporters remain surprisingly upbeat."
Canadian exporters are reporting that demand from U.S. customers has remained strong over the past six months. Three quarters of Canadian companies surveyed indicated that U.S. orders either increased or remained at the same level since the spring.
"What Canadian exporters have been experiencing in real time is now showing up in the economic data, where the U.S. private sector is showing sustained, broad-based growth," said Peter Hall, Chief Economist, EDC.
"In the U.S., housing markets are roaring ahead, consumers are spending at a fast pace and businesses are on the verge of parting with a chunk of their vast cash stash. Conditions slowed in the summer months, but the U.S. economy is shrugging it off, and companies that I have spoken with are feeling the positive impact."
EDC’s Trade Confidence Index (TCI) examines the attitudes of Canadian exporters as they forecast the business environment over the next six months through five index elements: trade opportunities, export sales, domestic sales, and both domestic and global economic conditions.
The TCI score overall moved down to 70.7, from 75.9 in the spring of 2012. The current score remains consistent with normal economic conditions, however.
The survey was conducted in late September and early October 2012. A total of 1,000 Canadian businesses participated, and the TCI was calculated on a total of 797 respondents.