Canadian companies that sell internationally are more confident about business prospects now than during the global economic boom period between 2003 and 2006, according to the semi-annual Trade Confidence Index by Export Development Canada (EDC).
EDC’s Trade Confidence Index (TCI) measures how Canadian exporters and investors are feeling about their business opportunities in the next six months – and the most recent overall TCI score, a summary of the state of Canadian exporter confidence, moved up 1.8 points to 77.2, its third consecutive increase.
The TCI survey was conducted between March 24 and April 4, 2014. A total of 1,000 Canadian businesses participated, and the TCI was calculated on a total of 752 respondents.
“Canadian exporters are far more bullish on the US economy compared with six months ago. Of those that believe that the global economy is on the upswing, almost one third believe that the US revival will be the primary catalyst in the coming six months,” said Peter Hall, Chief Economist at EDC, in a statement. “That’s up from just three per cent last fall.”
“Exporters are also much more upbeat about economic improvement in Europe,” Hall continued. “A huge driver of improved business opportunities is the fall of the Canadian dollar. Few were upbeat about a boost from the loonie six months ago, but of those that believed that business would be picking up in the next six months, 37 per cent think that our dollar will be the primary boost. That’s an impressive change.”
The survey found that a growing majority of respondents expect export sales to increase in the coming six months, with the proportion of those expecting higher sales edging up to 61 per cent from 55 per cent in the fall.
Also, half of all respondents said they plan to export to new countries over the next two years, with 34 per cent having already exported to new countries in the past two years.
A lower Canadian dollar is one of the key reasons that exporters are increasingly positive about international business opportunities, the survey revealed, as thirty-seven per cent of those with a positive outlook pointed to the softening Canadian dollar as a prime reason for their optimism, and 58 per cent of all respondents felt that the lower dollar had a positive effect on their export sales.
The U.S., China, Australia and the U.K. top the list of markets that Canadian companies have started selling to in the past two years.