OTTAWA—Canadian businesses are more pessimistic about the economy and their future prospects for sales at home and abroad, the Bank of Canada says.
A survey of 100 senior managers shows confidence is well off post-recession highs across the board—from sales expectations to investment and hiring intentions, even their ability to pass their costs on to customers.
But executives are most gloomy about sales.
For the first time in almost three years, more firms expect sales growth to slow this year.
And while it is difficult to say whether business executives are pessimistic because the question posed is relative to the past year, the central bank says the results suggest firms are more worried about selling their products into softer markets.
In the survey, 41 per cent said they expected slower sales, as opposed to 37 per cent that expect an increase. The rest were neutral.
Even respondents in the resource-rich West expect sales growth to slow, albeit coming off a strong performance in 2011, the bank says.
However, more firms plan to add employees in the next 12 months than was the case three months ago, although the balance of opinion remains below the post-slump high.
Analysts say the survey’s results aren’t surprising given concerns about the economy, particularly the near-term impact of the debt crisis in Europe.
The survey found little change in expectations for machinery and equipment investments, something the bank has been urging business to step up to improve woeful productivity.