TORONTO, March 31 /CNW/ - Canadian business owners need to ramp up their capital expenditures using the strong Canadian dollar, despite the uncertain U.S. economy, and seize a tremendous opportunity to export to foreign markets for future growth, according to a new report entitled Canada's Disturbing Productivity Performance, from Dr. Sherry Cooper, Chief Economist, BMO Capital Markets.
Highlights of the report include:
The Productivity Gap
- U.S. productivity grew 5.8 per cent in Q4 from a year ago - the
second largest increase in nearly forty years.
- Canadian productivity grew 1.1 per cent in Q4 from a year ago - the
most in nearly four years
- The productivity gap between the U.S. and Canada is the widest in
more than 30 years
"Canadian businesses need to take this opportunity to invest in
productivity enhancements, new processes, and training, along with providing
added value to products through innovation," said Dr. Cooper.
Seizing Opportunities in Export Markets
- Canada has benefited enormously from free trade agreements, as
exports grew from about 25 per cent of GDP to more than 35 per cent
before the most recent recession.
- The U.S. accounts for a disproportionate amount of Canada's exports -
70 per cent
- China accounts for about 3 per cent of Canada's exports, while India
and Brazil each make up about 0.5 per cent
Dr. Cooper added: "Canadian exporters had almost all of their eggs in the U.S. basket and were hit hard by the collapse in American demand. While the rest of the world also moved into recession, the rebound will be much more dramatic in emerging-market nations.
"With export opportunities to emerging nations and the unprecedented ability to invest through imports, the timing couldn't be better for Canadian medium-sized companies to take on the world," Dr. Cooper concluded. "Combining such efforts with the establishment of better trade relations with the behemoths of the future - China, India, and Brazil - is a sure recipe for success."
The full report is available at www.bmocm.com/economics.
SOURCE BMO BANK OF MONTREAL
For further information: For further information: For News Media Enquiries: Peter Scott, Toronto, PeterE.Scott@bmo.com, (416) 867-3996; Martha McInnis, Toronto, firstname.lastname@example.org, (416) 867-3996