Trade Confidence Index Down

Posted by Daniel Workman Jan 17, 2009

In Fall 2008, Export Development Canada (EDC) conducted a survey that asked 850 small, medium and large Canadian exporters about their confidence in sales prospects.

The results? Canada's Trade Confidence Index (TCI) score fell to its lowest level in EDC history.

Given the financial crises that accelerated this past November, it's no surprise that exporters were pessimistic about all aspects of their future sales potential. Unlike the previous 5 years, exporters suffered the biggest single drop in confidence for domestic demand. Export businesses often generate additional revenues from sales at home. Looking forward in 2009, 57% of survey respondents expect that Canadian market demand will fall.

In addition, 25% of survey participants were also gloomy about short-term export sales. Even though 39% of participants were upbeat about selling more exports, that percentage is 8% lower than just 6 months earlier in 2008.

The most troubling survey finding is that 64% Canadian exporters visualize a worsening global economy. Perhaps this comes down to "if America sneezes, the rest of the world catches a cold."

But there is a silver lining for Canada even if anemic sales growth in more traditional markets like the U.S. is expected to continue. Perhaps because of recent double-digit export gains, one-third of Canadian exporters expect improved opportunities to sell to emerging markets like China, Brazil, India and Eastern Europe.

If Canada can build on its comparative advantages in resources from clean water to uranium as well as in information and communication technology, the Great White North is on its way to even greater long-term trade success.