VANCOUVER: Canadian businesses express ongoing confidence about the economy and trade growth over the next six months, but they and other international respondents to the semi-annual HSBC Trade Confidence Index survey do so with some caution.
The survey of small and mid-sized businesses by HSBC Bank Canada (a subsidiary of HSBC Holdings plc) looks at 17 markets: Canada, Australia, Brazil, mainland China, France, Germany, Hong Kong, India, Indonesia, Malaysia, Mexico, Saudi Arabia, Singapore, Vietnam, the US, the US, and the UAE.
The index ranges from 0 to 200 with 100 being neutral.
The latest survey shows global trade confidence is positive and unchanged since May at 116. Canadian businesses scored 110, up a point from May’s index.
The most bullish companies come from India with an index rating of 140, followed by the UAE (125), Mexico (124), Indonesia (124), Vietnam (122), Brazil (122), Saudi Arabia (118), Malaysia (114) and China (111).
More mature markets are showing improving confidence, such as Canada (110), Australia (110), the UK (109), the US (108), Germany (107), France (106) and Hong Kong (106).
HSBC said respondents in all markets point to Greater China as having the strongest growth prospects in the next six months.
“Global trade confidence remains securely in positive territory across all surveyed markets, despite prolonged uncertainty in developed markets and more tempered growth in the emerging world,” Bill Nowicki, executive vice-president, head of trade and supply chain for HSBC North America.
He said trade between Canada and the US continues to be strong; however the new trade paradigm suggests emerging markets will drive future global trade growth.
“Companies looking to maintain long term profitability may want to consider emerging markets as important areas for growth,” he said.
The survey results show trade between Canada and the US continues to build. Most of the US businesses (86%) identify Canada as their top trading partner, a significant increase from 65% a year ago.
Canadian businesses see the barriers to trade improving; however they continue to have concerns with the impact on future growth of fluctuating exchange rates, costs of essential services such as logistics, shipping and storage, and product demand.
Their trade outlook is improving: 48% of Canadian companies are optimistic sales and new orders will increase over the next six months, while 44% feel they will maintain current levels. However, only 48% believe the economy will grow over the next six months, compared to 64% in May.
The semi-annual HSBC Trade Confidence Index is based on responses from 5,124 exporters and importers across 40 cities in 17 countries. The survey was conducted from July to September.