EDC survey: Exporter confidence rebounds with businesses more optimistic about economic conditions

For the first time, EDC's survey looks into company actions to reduce GHG emissions

OTTAWA, ON, May 16, 2024 /CNW/ - Exporter confidence has increased by nearly five points, according to Export Development Canada (EDC)'s latest biannual Trade Confidence Index (TCI). The TCI rose to 70.1 index points in mid-year 2024, up from 65.7 points at the end of 2023. However, it still sits below the historical average of 72.7.  

"While macroeconomic challenges persist, we're detecting a notable increase in optimism from Canadian exporters, the majority of which expect a global economic recovery from the pandemic. Additionally, many are expecting international sales to pick up later this year and are setting their sights on exporting to new markets in the short term," says Stuart Bergman, EDC's chief economist.  

The TCI, which surveyed more than 1,500 Canadian exporters this round, revealed that exporter confidence has increased across all regions and all business sizes. Ontario-based businesses reported the highest confidence with an index score of 70.9 and large businesses reported the highest confidence with a score of 74.4. With an increase of 7.57 index points, businesses in the transportation sector experienced the largest jump (to 70.13 points), followed by those in the information and communications technology sector, which saw an increase of 5.41 index points (to 70.48 points). 

Survey results show that 71% of respondents plan on exporting to new destinations in the next two years. Moreover, for those with operations abroad, two-thirds of respondents (64%) expect sales by their foreign affiliates to increase in the next six months and 47% expect their direct investments abroad to increase in the next six months. 

Despite the rise in trade confidence, most respondents reported that inflation and elevated interest rates continue to negatively impact their business. Three-quarters of survey respondents (75%) reported being impacted by inflation and 72% by higher interest rates. When it comes to trade barriers, on top are shipping costs experienced by 39% of respondents and economic conditions experienced by one-third (33%). About one-quarter (24%) of respondents also reported experiencing supply chain issues. Top supply chain issues included supplier challenges, faced by 67% of respondents, and transportation hurdles such as shipping and logistics, faced by more than half (52%) of respondents. 

The mid-year survey also assessed exporters' views on the impact of global elections on their business and export activities. Results show 20% of respondents expect the next U.S. election to have a significant impact on their business. Other top-of-mind elections include the European Union (37%), United Kingdom (31%), Mexico (24%) and India (19%). 

For the first time since EDC launched the survey in 1999, the TCI includes insights into exporters' emission reduction activities. "We did this to deepen our understanding of where Canadian exporters are in the transition to a low carbon economy and understand their progress against their own sustainability goals," added Bergman.  

Results reveal that the majority of respondents are undertaking some form of emission reduction activities. More than half (66%) reported reducing waste, increasing recycling (63%) and reducing energy consumption (51%). Less than a quarter (19%) reported setting net zero targets, and 20% are measuring and 17% reporting greenhouse gas (GHG) emissions.  

Other findings:  

• Of the current sample of exporters, a majority export to the U.S. (85%), followed by countries in Western Europe (34%) and Indo-Pacific (21%). The U.S. (44%) and Mexico (20%) are top countries that businesses are planning to export to.
• More than half of respondents (58%) identified global economic recession and 46% identified supply chain issues as top risks to their business.
• Survey respondents also noted key financial issues, such as cash flow maintenance (40%) and rising expenses (39%), and non-financial challenges, such as identifying and connecting with customers (31%) and limitations related to time and resources (29%).

For more information, visit EDC.ca.

Survey Methodology 

This TCI survey was conducted between March 1 and March 30, and released on May 16, 2024. Twice a year, EDC surveys Canadian exporters and businesses planning to export. The results are a pulse check of their level of confidence and expectations of international trade opportunities over the next six months. In this TCI release, 1,604 companies responded to our survey. The TCI data is weighted to represent the Canadian exporter and ready-to-export population.   

About EDC

Export Development Canada (EDC) is a financial Crown corporation dedicated to helping Canadian businesses make an impact at home and abroad. EDC has the financial products and knowledge Canadian companies need to confidently enter new markets, reduce financial risk and grow their business as they go from local to global. Together, EDC and Canadian companies are building a more prosperous, stronger and sustainable economy for all Canadians.

For more information and to learn how we can help your company, call us at 1-800-229-0575 or visit www.edc.ca.

SOURCE Export Development Canada 2 (EDC)

Media Contact: Export Development Canada, 1-888-222-4065, [email protected]