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Winnipeg Free Press - PRINT EDITION
Business survey reveals surprisingly optimistic outlook
OTTAWA -- Canadian firms remain surprisingly optimistic about the next year, with positive expectations for sales, investment and hiring despite concern about the global economy, the Bank of Canada's new survey of business intentions suggests.
The much-watched quarterly survey, released Monday, reveals a Canadian business sector that is wary about the renewed uncertainty and risks over the global outlook, but mostly confident they will be able to cope.
The most encouraging reading is on hiring intentions, with 59 per cent of firms saying they plan to hire additional workers in the next 12 months; six per cent plan to cut jobs.
"Responses to the summer survey suggest that businesses generally remain positive about the outlook, but are mindful of renewed uncertainty regarding the global economic environment," the central bank said in its analysis of the findings.
"Several factors support the overall view... including commodity-related activity and the resulting spillover effects, firms' own initiatives to reposition themselves for growth, and gradually improving U.S. demand."
The survey was conducted between May 22 and June 14, following months of headlines about the European Union's inability to devise a long-lasting solution to the region's debt crisis. The EU leaders surprised many in late June when they announced a plan to pump cash directly into troubled banks, rather than adding to the national debts of individual member countries.
If there was one sign European difficulties are crossing the Atlantic, it was on the issue of credit conditions. By a narrow margin, firms reported some tightening conditions over the past three months. That finding was undercut somewhat by the accompanying survey of senior loan officers, who said business-lending conditions had eased somewhat in the second quarter.
The overall findings went against the grain of most business and consumer confidence samplings in the past two months, which have generally detected a darkening sentiment.
In a forecast released Monday, the Organization for Economic Co-operation and Development said China and India had entered more marked economic slowdowns while growth continues to moderate in most major industrial economies.
-- The Canadian Press
Republished from the Winnipeg Free Press print edition July 10, 2012 B5
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