The 2020 Mid-Year Economic Update_long

Is Economic Confidence Eroding in Canada?

It seems like eroded confidence in the economy is seeping into our northern neighbor's boardrooms. According to the second-quarter CICA/RBC Business Monitor report, only 6% of executives are more confident in the Canadian economy than they were a year ago.
 
The survey says that 23% of respondents are very optimistic about the economy, compared with 67% a year ago. Just under half of respondents said they had been negatively affected by the U.S. economy.
 
Respondents in Alberta and Manitoba/Saskatchewan were most optimistic about prospects in their provinces; those in Ontario responded with the least amount of optimism about their province. The province is facing manufacturing losses and impacts from the weak U.S. dollar.
 
The culprit, at least ...

It seems like eroded confidence in the economy is seeping into our northern neighbor’s boardrooms. According to the second-quarter CICA/RBC Business Monitor report, only 6% of executives are more confident in the Canadian economy than they were a year ago.
 
The survey says that 23% of respondents are very optimistic about the economy, compared with 67% a year ago. Just under half of respondents said they had been negatively affected by the U.S. economy.
 
Respondents in Alberta and Manitoba/Saskatchewan were most optimistic about prospects in their provinces; those in Ontario responded with the least amount of optimism about their province. The province is facing manufacturing losses and impacts from the weak U.S. dollar.
 
The culprit, at least according to this survey, seems to be rising energy prices. The number of respondents saying higher energy prices were of major or moderate importance to their company was up significantly, to 53% from 39% a year ago. About 80% say their companies have seen increased costs. Three-fourths of respondents said their companies had to absorb some or all of their rising energy costs. But just under 40% of respondents say they’ve made changes in response, such as changes in building operations, shipping/logistics/vehicle usage and general cost reductions.

The survey results mesh with what I’ve heard about the state of the Canadian economy in the past six months. Canada is seeing rising energy prices like the rest of us, its dollar is strong, and raw materials costs and a struggling residential construction sector in the U.S. and now somewhat in Canada have not helped. But according to various government reports, Canadian domestic demand continues to hold up, offsetting any fall in net exports resulting from the weak U.S. dollar. Another bright spot: oil and gas. Optimism and confidence levels in this sector have gone up from 2007.
 
The survey is issued by the Canadian Institute of Chartered Accountants and RBC Royal Bank. Click here to read the full results.
 
What are you seeing in Canada? Comment below; you may need to sign in first.

About the Author
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

By subscribing, you are agreeing to MDM’s Privacy Policy.

2

articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

0

articles left

This is your last free article

Subscribe to MDM Premium today and get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events

1

article
left

You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.