A survey by the country’s trade financing agency showed the first back-to-back rise in confidence among the nation’s exporters in more than three years on optimism the global economy is gathering steam.
Export Development Canada’s Fall 2013 Trade Confidence Index rose to 75.4 from 72.6 in the spring and 70.7 a year ago, according to a report from Ottawa today. The semi-annual index remains below the 75.9 recorded in the first half of 2012.
“There’s a simultaneous echo of optimism around the world, including consumers and businesses in the U.S. and Europe,” EDC chief economist Peter Hall said in the report.
The survey comes a day after Canada reported its first merchandise trade surplus in 22 months, snapping the longest string of deficits in at least a quarter century. The economies of Canada’s major trade partners have shown improvement this year, with U.S. growth accelerating to 3.6 percent in the third quarter and euro-area countries emerging from recession.
Respondents who were optimistic about global economic conditions outnumbered pessimists for the first time since the early 2011, the EDC report showed. The so-called balance of opinion, which subtracts negative from positive responses, swung to 7 percentage points from a prior reading of negative 10 points.
Exports may also benefit from the Canadian dollar’s decline yesterday to a three-year low against the U.S. currency, which makes the price of exported goods cheaper. The EDC survey said that 71 percent of respondents agreed a strong currency had a high or medium impact on their exports, unchanged from the last survey.
Bank of Canada Governor Stephen Poloz, who was head of the EDC until he took over at the central bank in June, isn’t as optimistic as his old employer’s survey. Poloz said yesterday the economy wasn’t showing signs of a rotation of demand to exports and business investment from indebted consumers. Prices for oil produced in Canada, a major export, have eased while “non-commodity exports continue to disappoint,” the central bank said.
The Trade Confidence Index was based on 769 responses to a telephone survey taken Sept. 23 to Oct. 4. Because the survey doesn’t use a random sample, there is no margin of error reported. The report has been compiled since 1999.