Bank of Canada survey sees clouds on horizon
A business survey conducted by the Bank of Canada sees some green shoots of optimism in corporate Canada but notes that some companies are seeing slowing or declining sales growth within the past year.
In its business outlook survey, the central bank says weak demand and domestic uncertainty are weighing on the outlooks for businesses they monitor.
The survey "provides some positive signs for the economic outlook, notably for exports and investment, although responses do not yet appear to suggest a significant strengthening," the bank said. "For many businesses, weak demand and domestic uncertainty continue to temper sales expectations and expansion plans."
Thirty-four per cent of those surveyed saw sales growth increase over the last 12 months, while 37 per cent saw less sales growth. The remaining 29 per cent said their sales grew at about the same pace as before.
Uneven results across Canada
"Expectations of improving sales growth are uneven across regions and sectors, but are generally more positive among firms that are benefiting directly or indirectly from increasing global activity," the bank said.
An improving U.S. economy is helping Canadian companies that focus their business on that part of the world. Fifty-one per cent of respondents said they expect sales growth to improve over the next 12 months compared with 22 per cent who expect less sales growth.
Companies reported little change in credit conditions, with 16 per cent saying it's harder to get money now, 13 per cent saying it's gotten easier and 70 per cent saying there's been no tangible change.
More companies said they intend to spend more money on new equipment and hire more workers than said they intend to make reductions this coming year.
The survey was conducted between Nov. 18 and Dec. 12, 2013.