Canadian Manufacturing

Investment intentions rising: BOC

OTTAWA: Canadian businesses are again considering investments to spur productivity and growth, according to the Bank of Canada’s Autumn Business Outlook Survey.

The outlook, released today, is the result of interviews with executives from 100 companies across Canada. The results are recorded as a balance-of-opinion. And on balance, firms are reporting an increase in sales over the past 12 months and say they expect a continued improvement over the next year.

Indeed, this sentiment rose to a new high, suggesting an increase in investment in machinery and equipment over the next 12 months. The report says many firms are anticipating a return to “more normal levels of spending,” while focusing on enhancing productivity or expanding into more profitable lines of business.

More companies are also citing labour shortages and a lack of workers with highly specialized knowledge as restrictions to their their ability to meet demand, though this number is not as high as it was before the recession began.

But this anecdotal evidence is inconsistent with the balance of opinion on hiring, which declined in the third quarter, indicating a loss of momentum in the economic recovery.

The sentiment is also borne out by Statistics canada’s Labour Force Survey for September, which reported a relatively flat labour market with employment declines in some provinces, including Ontario, Saskatchewan, New Brunswick and PEI.

Perrin Beatty, president and CEO of the Canadian Chamber of Commerce, says the employment situation must become the prime focus of the Federal Government.

“While we still see the recovery taking hold, the loss of jobs indicates that it is fragile and that we need to do everything we can to see it continue,” says Beatty.

“The figures in the [Statistics Canada] report confirm the wisdom of the government’s decision to hold EI premium increases to a minimum in the coming year and also underscore the importance of a clear message that the corporate tax relief that has been promised will continue. Business confidence requires certainty and calls by some politicians to add a multiple-billion dollar tax bill to what businesses have been told to plan for will discourage investment and job-creation.”

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