Notable increase reported by survey from EDC
Canadian exporters are reporting stronger confidence in their outlook, raising hopes for improvement in the economy.
The latest Trade Confidence Index from Export Development Canada has risen to 70.1 index points at mid-year 2024 from 65.7 at the end of 2023, although this is still lagging the historical average of 72.7. The poll of 1500 exporters across all regions and industries found a widespread increase in confidence, led by Ontario respondents with a 74.4 score. Transportation led the gains in sentiment.
Most respondents export to the U.S. (85%), Western Europe (34%) and Indo-Pacific (21%). The U.S. (44%) and Mexico (20%) are top countries that businesses are planning to export to.
Entering new markets is expected by 71% of respondents. More than two thirds of those exporters with foreign affiliates expect to see increased sales from those oversees operations in the next six months, while almost half of respondents expect to increase their international direct investments.
"While macroeconomic challenges persist, we're detecting a notable increase in optimism from Canadian exporters, the majority of which expect a global economic recovery from the pandemic. Additionally, many are expecting international sales to pick up later this year and are setting their sights on exporting to new markets in the short term," says Stuart Bergman, EDC's chief economist.
Greatest concerns
Exporters are not having it easy though with inflation and interest rates impacting more than seven in ten respondents. Shipping costs and supply chain issues were cited by around four in ten. Global recession and elections, especially in the United States, European Union, United Kingdom, Mexico, and India also noted as a concern.
Top financial concerns include cash flow maintenance (40%) and rising expenses (39%).
Asked about their action on emissions, 66% of the exporters who took part in the poll reported reducing waste, increasing recycling (63%) and reducing energy consumption (51%). Less than a quarter (19%) reported setting net zero targets, and 20% are measuring and 17% reporting greenhouse gas (GHG) emissions.
