Exporters see higher global sales into 2016: EDC

… despite concerns about global economic conditions

OTTAWA — Canadian exporters remain optimistic export sales will increase over the next six months, although more than 25% believe world economic conditions will worsen over the same period, according to an Export Development Canada (EDC) survey.

The EDC’s Trade Confidence Index (TCI), a semi-annual survey that examines the attitudes of exporters, found overall trade confidence fell for the third survey in a row – from 75.1 in the spring to 72.8 in late fall – but remained in line with average confidence levels for the past 10 years.

The decline is attributed to exporters having a less positive outlook for international business opportunities and domestic sales, along with weaker confidence in world economic conditions.

“Even though there was a marked increase in net pessimism about key emerging markets such as China and Brazil, exporters continue to see opportunities in developed markets, particularly the United States,” said Peter Hall, the federal export agency’s vice-president and chief economist.

“The continuing recovery in the American economy, combined with a weaker Canadian dollar, is a large part of why nearly two-thirds of exporters expect their international sales to increase over the next six months,” he noted.

The US continues to be Canada’s top export market, with 84% of those surveyed selling goods or services there, and nearly half of them reporting increased sales since the spring.

One in five exporters say the lower Canadian dollar allows them to offer their products at a lower price.

Yet trade confidence declined for companies of all sizes. Small exporters recorded the largest decrease, moving from 75.9 to 72.8. Confidence was also down across all industry sectors, led by transportation – down from 75.9 to 69.2 – driven primarily by worsening outlooks on domestic and global economic conditions.

Most regions in Canada also expressed lower confidence. The biggest decline was found in Quebec, which went from 77.2 to 71.6, matching the West with the lowest confidence level.

However, Hall says more than half of current exporters still say they’re planning to sell into new markets over the next two years. He says it’s also a positive that export intensity increased over the past six months, with 45% of companies indicating that more than half of their total sales take place outside of Canada, up from 42% six months ago.

Here are some survey highlights:

• 62% of exporters believe their international sales will increase over the next six months.

• 82% currently doing business in Europe said sales have remained the same or increased over the past six months.

• 38% of companies began exporting to new countries within the past two years.

• 25% are planning to make investments outside of Canada.

• 42% expect domestic sales to increase in the next six months (down from 48% in spring).

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