Exporter pessimism fades, believe freefall in exports ending: EDC survey

    OTTAWA, June 17 /CNW Telbec/ - Canadian exporter confidence rebounded in
the spring from an unusually depressed level six months ago, the largest
single increase since the post-9/11 period in Export Development Canada's
(EDC) semi-annual Trade Confidence Index (TCI).
    "The jump in confidence is needed relief. The market mayhem last fall
deepened what was already a serious loss of confidence," said Peter Hall,
Vice-president and Chief Economist of EDC. "The current gain is impressive,
but it has only lifted confidence marginally ahead of the 9/11 low point."
    The spring result interrupted a three-period tumble dating back to the
fall of 2007, with each successive drop setting a new record low level.
    The overall index jumped to 68.5 from a record low of 61 in the past 6
months. The survey examines the attitudes of Canadian exporters through five
index elements: trade opportunities, export sales, domestic sales, and both
domestic and global economic conditions.
    Key to the jump in the overall TCI is a sense that both global and
domestic economic conditions will improve. About one-quarter of respondents
see brighter near-term prospects, up sharply from the previous survey. There
was an even more dramatic change in the share of those expecting worse
conditions. From a clear majority in the past survey, the pessimists shrunk
back to about a quarter of total respondents.
    Although the TCI is among a handful of economic indicators that are up,
exporters are decidedly less optimistic about customer demand. Their outlook
for domestic and export sales remains dim and is largely unchanged from the
fall of 2008, which witnessed the most pessimistic sales outlook over the
TCI's history.
    The dollar forecast indicator continues to be the most volatile issue in
the survey. "The recent sharp increase in the Canadian dollar came as a
surprise to most, two-thirds of exporters expected a stable or declining
    The preferred currency strategy is to simply ride out the dollar's ups
and downs. Fewer intended to make structural changes to accommodate the
dollar. A small but rising share is relying on hedging as a shield against
possible currency shifts.
    Despite the economic turbulence and uncertainty facing exporters, the
survey suggests that they still believe trade opportunities are present.
One-third of respondents, about average for the past 7 years, expect trade
opportunities to improve in the near-term.
    The transportation and infrastructure/environment sectors experienced the
greatest increase in their TCI scores from the fall of 2008. The near term
positive outlook for the transportation sector could reflect the bailout
announcements and support for the auto parts suppliers during the survey
period. On the infrastructure side, many countries have initiated stimulus
packages to address the global downturn with significant infrastructure
    Exporters experiencing the least optimism are those in the extractive
sector, largely related to plummeting prices from their historical highs in
2008. Prices are expected to remain low in 2009. According to Statistics
Canada, energy exports have lost nearly half of their value over the last two
quarters and EDC is forecasting a 41 per cent decline in exports for this
sector in 2009.
    Regionally, Western Canada posted the most optimistic score of 71 (up
from 63 in the fall of 2008), followed closely by Ontario at 69 (up from 60),
Atlantic Canada at 67 (up from 58) and Quebec at 66 (up from 62).
    Opinion Search Inc. conducted the survey in late April and early May of
2009. A total of 1000 Canadian businesses participated, and the TCI was
calculated on a total of 858 respondents. The survey results are considered
accurate to +/- 3.1 per cent, 19 times out of 20.
    For more information about EDC and the Trade Confidence Index, visit

    EDC is Canada's export credit agency, offering innovative commercial
solutions to help Canadian exporters and investors expand their international
business. EDC's knowledge and partnerships are used by more than 8,300
Canadian companies and their global customers in up to 200 markets worldwide
each year. EDC is financially self-sustaining, a recognized leader in
financial reporting and economic analysis, and has been recognized as one of
Canada's Top 100 Employers for eight consecutive years.

For further information:

For further information: Media: Phil Taylor, Export Development Canada,
(613) 598-2904, Blackberry: ptaylor@edc.ca

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