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)