Canadian firms will be cautious about investing until growth prospects improve, finds the BoC’s summer business outlook survey.
This is in line with the central bank’s spring survey findings, which revealed firms say business conditions will likely remain challenging throughout 2013.
The summer survey says, “While businesses [across the country] reported some firming in sales activity, they foresee a marked change in the pace of their sales growth over the next 12 months. Firms generally report a targeted approach to increases in investment over the near term, and often cite plans to use modest hiring to meet any additional operational needs.”
It adds business leaders are relying “more heavily on existing capacity in the short term, while awaiting signs of strengthening demand. Labour shortages remain subdued.”
Even the uptick in U.S. growth and employment hasn’t inspired execs. The survey finds, “While many firms note gradually improving U.S. demand bodes well for their sales outlook, they generally expect U.S. growth to be slow over the next 12 months, and competitive conditions in the U.S. market to remain intense.”
Credit conditions in Canada are essentially unchanged since the last survey. In the spring, the central bank said businesses saw a minor tightening in credit conditions early this year. For more, check out the survey on the BoC’s website, along with its latest Senior Loan Officer Survey.
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