The Reminder is making its archives back to 2003 available on our website. Please note that, due to technical limitations, archive articles are presented without the usual formatting.
Exporter confidence rose slightly during the last six months, but many remain cautious about sales growth this year, according to the latest survey by Export Development Canada (EDC). "We've been forecasting that 2004 would be a year of synchronized growth for the global economy," says EDC vice-president and chief economist Stephen Poloz. "Exporter sentiment is more bullish than six months ago because of positive economic news, but the survey also shows Canadians are concerned about the potential implications of a rising dollar on their sales volumes." EDC's Trade Confidence Index (TCI) is based on a random sample of 1,000 Canadian companies, representing a cross-section of industry, regions and size of business. The latest reading is 74.8 out of a possible 100 points, an increase of 1.5 points from the 73.3 registered in the spring of 2003. It is a composite score based on five questions asked twice a year. While confidence in the domestic and global economies rose, this improvement has not so far translated into expectations of stronger export sales, which remain about the same as six months ago. Overwhelmingly, exporters cited concern over the rising Canadian dollar as one of the primary reasons for their caution. Indeed, 90 per cent of exporting companies view the value of the dollar as pivotal to their success in foreign markets. Forty-three percent believe the dollar will remain at current levels ($.75-$.76 US when the survey was taken), while 37 per cent think that it will increase in the next six months. Only 20 per cent of businesses now expect the dollar to decline, which is less than the 30 per cent reading in the spring. See 'Confidence' P.# Con't from P.# Companies in nearly all industry sectors expressed greater trade confidence, with base & semi manufactured goods, information technology and transportation posting the most impressive gains, while the ban on Canadian beef and sluggish demand for consumer goods kept confidence levels unchanged by companies in the agri-food and consumer goods sectors. Confidence levels in Western Canada rose to 77 from 74 as exporters anticipate continued export growth in oil and gas, industrial equipment and agri-food. Similarly, increasing U.S. demand for resource-based exports from the Atlantic region caused confidence levels to rise to 76 from 73 across the region. In Ontario and Quebec, where the rising dollar is felt more acutely because of the size of the manufacturing sector, trade confidence remained unchanged during the last six months. The survey also found that Canadian businesses have become even more bullish in their hiring intentions with 34 per cent planning to add staff in the next six months, compared to 30 per cent last spring. The majority (59 per cent) see their hiring intentions remaining the same and only six per cent said they intended to decrease staff. The U.S. (80%) continues to be identified as the export market of choice by Canadian exporters, followed more distantly by the European Union (19%), Asia (17%) and Central and South America (11%). In the last 18 months there has been a considerable upgrade in the importance of the Asian market for Canadian exporters. EDC Economics expects the global economy to expand by four per cent in 2004 compared with 3.3 per cent in 2003. Growth is expected to be balanced around the world: 4.5 per cent in the U.S., 3.6 per cent in Canada, six per cent in Asia, 4.5 per cent in Central & Eastern Europe and Russia, two per cent in Western Europe and 1.2 per cent in Japan.
