"The April numbers reinforce the glimmer of hope that appeared in our March survey," said CME president, Jayson Myers. "While this is encouraging, I don't think we are out of the woods just yet. There are still many risks ahead for the Canadian economy, including more job losses, difficulty in obtaining financing and growing protectionism in our major export market, the U.S."

More than 550 companies participated in the survey conducted in the first two weeks of April. Exactly 63 percent of firms expect orders to increase between April and July, up 12 percentage points from March's figure of 51 percent. And there's some good news for job seekers: 13 percent of companies expect to increase employment over the next three months, which is on par with the March results. The number of firms who are planning layoffs also shrunk over the past month, decreasing 42 to 36 percent.

"The manufacturing sector has lost 135,000 jobs so far this year, so this is a ray of hope," said Myers. "The bad news is that while the number of companies who will be reducing their workforce is down, one-third are still planning to cut jobs. Current orders have fallen off significantly the past three months, and many companies are reporting that inventories are too high."

But the most worrisome element of the survey is an indication the credit crunch is still an issue for all manufacturers and exporters, the CME said. Approximately 56 percent of businesses are still reporting difficulties accessing adequate levels of financing, including working capital, extending lines of credit and accessing financing for new technologies and product development. That's an improvement of only three percent over March.

"If this is in fact the beginning of a positive trend in the economy, we are running the risk of that the failure to secure adequate financing will jeopardize any type of recovery," Myers said.

To view the full report, visit www.cme-mec.ca.