Canadian manufacturers ‘cautiously optimistic’ about economy: CME survey

Despite challenges – like a soaring Loonie in the earlier part of the month and tightening credit conditions – the economic outlook for Canadian manufacturers and exporters is cautiously optimistic, according to the data in Canadian Manufacturers & Exporters’ June Business Conditions Survey (read report PDF).

“This sentiment is a little surprising considering the wild rollercoaster ride manufacturers and exporters had in June, courtesy of a volatile currency,” explains CME president and CEO Jayson Myers. “The outlook for orders and employment continues to be positive and I hope this trend continues.”

The June numbers reinforce the signs of stability that appeared in the last three monthly surveys.

This month, 608 companies participated in the survey conducted the first three weeks of June. While most manufacturers and exporters surveyed this month are still reporting the value of their orders is lower than it was three months ago, results this month reinforce the beginning of a positive trend that started in May.

Over this period, only 51 percent of companies report that orders have fallen in value compared to three months ago, a six per cent improvement over May.

The positive trend identified for new orders last month continues. A majority – 69 percent – of firms report that they expect the value of new orders to stay the same or increase in value over the next three months, a slight increase of three per cent from May. Only 31 percent say that orders are likely to decrease between June 2009 and September 2009 (a slight improvement over 34 percent last month), and 24 percent expect to see orders increase, a slight drop from 28 per cent last month.

And there’s some good news for job seekers – 13 per cent of companies expect to increase employment the next three months, which is on par with the results from the previous three surveys. The number of firms who are planning layoffs has decreased from 38 to 27 per cent.

“The manufacturing sector has lost more than 135,000 jobs so far this year, so this is encouraging,” Myers said. “However, we still have more than one-fifth of companies who are planning on shedding jobs.”

And the credit crunch is still a major obstacle for manufacturers and exporters. An increase over last month, 77 per cent of manufacturers and exporters report that they are experiencing difficulties in accessing or are unable to access financing; with the hurdles being financing for working capital purposes, operating a line of credit, capital investment purposes and investments in new technology.

“Credit cannot continue to be an issue or it will jeopardize any type of recovery.”

The association represents more than 10,000 leading companies nationwide. Its membership network accounts for an estimated 82 percent of total manufacturing production and 90 percent of Canada’s exports.
www.cme-mec.ca