A new analysis of Canada’s key trading firms suggests they are increasingly optimistic about the prospects for boosting exports to the rest of the world, which the Bank of Canada calls the missing piece in the country’s economic recovery.
The study of 769 exporters and investors, conducted by Export Development Canada and released Thursday, shows more are anticipating an improvement in global conditions in the next six months and confident they will be able to take advantage of it.
The optimism lifted the EDC’s fall trade confidence index by 2.8 points to 75.4, following a similar gain in the spring. More significant, said the federal agency, is that it constitutes the first back-to-back improvement in sentiment since 2010.
“Back-to-back increases in trade confidence haven’t happened since the deluge of government spending hit the world economy in 2009,” said EDC chief economist Peter Hall.
“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.”
The Bank of Canada says the principal missing ingredient needed for Canada’s economy is a “rotation” from domestic demand to more export-oriented production, to attain sustainable growth
But in a statement on Wednesday, the bank noted that transition in the economy still had not occurred.
There was some mild encouragement Wednesday, when the country reported its first monthly trade surplus in 22 months, although it was small and based on declining imports rather than rising exports.
As of October, exports had increased 5.3 per cent from a year earlier, a modest but positive bump considering that the shipments are still below pre-slump levels.
The study is based on a survey conducted in late September and early October.
The survey found 55 per cent of respondents were anticipating higher sales in the next six months and 40 per cent said that orders from the U.S. have increased during the past six months, both improvements from the spring results.
As well, almost a third of respondents said they expected to hire more employees during the next six months, although almost three quarters said they anticipate difficulty finding the skilled workers they will need.