Canadian manufacturers and exporters are experiencing a sharp contraction in customer demand, but the worst may be yet to come.
New orders for goods are down sharply in most manufacturing and exporting sectors as a result of the credit market meltdown in the U.S., according to trade and industry association Canadian Manufacturers & Exporters.
"The message we're hearing from manufacturers and exporters across the country is that, 'we ain't seen nothing yet,'" CME president Jayson Myers said Thursday.
The warning came in the first of a monthly series of business conditions surveys that the CME will conduct across Canada's manufacturing and exporting sectors to provide feedback from businesses facing the full force of the economic storm.
The U.S. credit crisis is already being felt in Canada, where companies are finding it increasingly difficult to secure financing.
"Our members tell us that there are more production closures and job losses to come," said Myers, who added that the contraction is likely to continue into 2009's first quarter.
"We need urgent action to ensure financing continues to flow to creditworthy businesses if we are to avoid an industrial meltdown that would take Canada into deep recession."
Highlights from the December survey include:
59% of companies report that orders have fallen in value since September, while only 14% of firms report that orders have increased. A full 17% of companies report that orders have fallen by more than 30% since September.
52% say that orders are likely to drop further by March 2009.
38% say that employment levels are likely to fall over the next three months; and
more than one-third report that they're experiencing difficulties finding adequate levels of financing.
"The situation for Canadian industry and the Canadian economy is very serious," said Myers. "2009 will be an extremely challenging year."
A total of 327 companies with operations in all provinces participated in the survey.