Canadian firms need to concentrate on exports: Carney
Published by Steve Coleman on April 02, 2012
Bank of Canada Governor Mark Carney says Canadian companies have it half right when it comes to improving their finances.
While Canadian manufacturers have been retooling their operations and worked on growing domestic demand, they haven't been done enough to ensure they have access to world markets. Slow US economic growth is only hampering attempts to regain some of the world market share that Canada has lost in the last decade.
"Exports still have not regained their pre-crisis peak, and in fact remain below their level of a decade ago," Carney said in a speech to business and community leaders in the Kitchener-Waterloo region. "Canada has steadily lost global market share throughout this period... The combination of overexposure to the US market and under-exposure to faster-growing emerging markets is almost entirely responsible for Canada's further loss in world market share over the last several years."
The current trend of concentrating too much on doing business at home should be replaced with efforts to get into growing markets in parts of the world like Asia, Carney said. All of the selling at home has left Canadian citizens tapped out and with growing debts.
Bank of Canada economists predict the fundamental problems won't change in the near future. Businesses will continue to face a weak US recovery, strong growth in emerging markets, historically-high commodity prices and a high dollar that won't come down anytime soon. To counter that, companies need to think about exporting beyond North American shores, Carney said.
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