CME survey points to bottom of recession, slow recovery

End of the recession?

Not yet, but amidst a sense of continued stability, Canadian manufacturers and exporters are optimistic that this economic warming effect will continue into the fall, according to the data in Canadian Manufacturers & Exporters’ July Business Conditions Survey.
“
“The good news is that it appears the recession is bottoming out, with a number of firms seeing orders remain the same or increase over the next three months, but it’s premature to say the sector is on the way to a strong recovery,” says CME president and CEO Jayson Myers.
“
The July data reinforces the signs of stability that appeared in the last three monthly surveys.
“
This month, 583 companies participated in the survey conducted the first three weeks of July. While most manufacturers and exporters surveyed this month report the value of their orders is lower than it was three months ago, there is a strong indication that the downward slide has stabilized.
“
Over this period, 53 per cent of companies report that orders have fallen in value compared to three months ago, a 12 per cent improvement since April.
“
The positive trend identified for new orders the past two months continues. A majority – 71 per cent – 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 two per cent from June.
“
“According to this data, there may be increased gains in production levels in the final quarter,” adds Myers.
“
But employment prospects, while stabilized, are not as bullish. Only 12 per cent of companies expect to increase employment the next three months, which is on par with the results from the previous four surveys.” The number of firms who are planning layoffs hovers around 21 per cent.”
“
And the credit crunch is still a major obstacle for manufacturers and exporters. Still, 73 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. That’s a slight improvement over last month’s 77 per cent, but on par with the previous five months’ data.
“
“The difficulties in accessing financing may thwart the pace of recovery,” says Myers. “If this trend continues, my fear is that we will see a very long, drawn-out recovery.”
“
Click here to view the report