EDC Trade Confidence Index Survey: Balance of Opinion Rising
The Trade Confidence Index (TCI) climbed 1.8 points in spring 2014, up to 77.2 from 75.4 in fall 2013. This marks the third consecutive increase since fall 2012 and is the highest level of trade confidence of the post-stimulus (post-2010) period.
Conducted twice a year, the Trade Confidence Index (TCI) survey captures the outlook and opinions of Canadian exporters in five key areas:
• domestic sales
• export sales
• domestic economic conditions
• world economic conditions
• international business opportunities
The balance of opinion rose once again for many of the five TCI components in spring 2014, climbing most for
• export sales
• international business opportunities
• domestic sales
For domestic economic conditions and world economic conditions, the balance of opinion held relatively steady. The balance of opinion refers to the percentage of respondents reporting improving conditions minus the percentage reporting worsening conditions.
Other key findings:
• The clear majority (61%) of survey respondents expect export sales to increase over the next 6 months, citing increased activity and production as well as new services and products as the top reasons. The percentage of those expecting export sales to decrease fell to 4%, continuing a 6-year downward trend from a high of 24% in fall 2008.
• Exporters see the U.S. as a global economic engine. Forty-three percent of respondents who export to the U.S. said orders from U.S. customers have increased in the past 6 months – up from 35% in spring 2013. Additionally, of the 24% of respondents who said world economic conditions will improve in the next 6 months, 32% attributed their confidence to the strengthening U.S. economy.
• A lower-value Canadian dollar is the prime reason respondents are increasingly positive about international business opportunities. The percentage of respondents who feel international business opportunities will improve rose to 43% in spring 2014 from 34% the previous fall; 37% of those with a positive outlook pointed to the fall of the Canadian dollar as a reason for this. During the survey period, the Canadian dollar averaged 90 cents compared with the U.S. dollar.
Source: Export Development Canada, http://www.edc.ca/EN/Knowledge-Centre/Economic-Analysis-and-Research/Pages/trade-confidence-index.aspx.
