Canadian exporter sentiment rose to a four-year high, aided by a weaker currency and optimism about new orders from the U.S. and Europe, according to a survey by the government’s trade finance agency.
Export Development Canada’s Trade Confidence Index rose to 77.2 from 75.4 in the last report on Dec. 2, according to a report from Ottawa today. The semi-annual index reached 78.8 in the first half of 2010.
Foreign shipments have been one of the weaker parts of Canada’s economy since the 2008 global financial crisis, lagging behind gains in housing, employment and retail sales. Bank of Canada Governor Stephen Poloz, who used to lead EDC, says the “ingredients” for a recovery are in place, including the lower currency and rising global demand.
“A huge driver of improved business opportunities is the fall of the Canadian dollar,” EDC chief economist Peter Hall said in the report. Executives are also “far more bullish on the U.S. economy,” he said.
Canada sends three-quarters of exports to its southern neighbor, and the EDC survey showed one-third of respondents identified the U.S. as a “primary catalyst” for a stronger global economy, up from 3 percent six months earlier. Fifty-eight percent of those surveyed said the weaker currency had a positive effect on their sales.
The Canadian dollar has fallen 1.2 percent against the U.S. dollar in the past six months, the worst performer among 10 major currencies tracked by Bloomberg.
The percentage of companies that said sales will rise in the next six months increased to 61 percent from 55 percent, the report showed.
The Trade Confidence Index was based on 752 responses to a telephone survey taken March 24 and April 4. Because the survey doesn’t use a random sample, there is no margin of error reported. The report has been compiled since 1999.