OTTAWA ? Canadian companies are offering a glimmer of hope that the recent slowdown in the economy could soon be behind us.
While sales by Canadian companies were stagnant at the end of last year, as global growth slowed, the outlook for future business activity appears to be picking up.
The Bank of Canada said Monday its quarterly survey of companies showed ?further indications that firms have faced a period of softness in economic conditions.?
The survey ? gauging business sentiment in the fourth quarter of 2012 ? found 35% of companies saw sales growth weaken over the past 12 months. That is up from 27% in the previous quarter.
However, the sales outlook for the next 12 months improved, with 44% expecting faster growth, the bank said, up from 35% in the third quarter.
The improvement reflects how some companies are ?pursuing new business opportunities or adopting strategies to maintain market share in a challenging ?demand? environment,? the bank said.
These companies were primarily in the manufacturing sector and, more often than not, located in central and Eastern Canada.
Craig Alexander, chief economist at TD Economics, said the survey ?is very consistent with the view that the economy is going to improve in 2013. But the pace of growth is only going to be moderate.?
Meanwhile, the investment picture also improved in the fourth quarter, the survey found, with 43% of companies saying they plan to increase spending over the next 12 months ? up from 37% previously.
?If businesses are feeling a little bit better about the likelihood of doing investment, then that?s a positive for the economy,? Mr. Alexander said.
Still, the survey also found that hiring intentions were little changed. Only 25% of companies said they were facing labour shortages in the fourth quarter, compared to 33% in the last survey.
The Bank of Canada surveyed about 100 companies between Nov. 10 and Dec. 13 for Monday?s fourth-quarter results.
RBC economist Nathan Janzen said the central bank will likely take some comfort in the improved sentiment, ?particularly given that the fourth-quarter survey was collected prior to the partial U.S. ?fiscal cliff? resolution in early January 2013.?
?As well, the improvement in the employment index suggests some optimism that the relatively solid labour market backdrop in recent months could be maintained early in 2013,? he said in a note to inventors.
Employment in Canada was up by 39,800 in December ? pushing the jobless rate down 0.1 percentage points to 7.1% ? after more than 59,000 positions were created in November.
?With that said, improvement in labour market indicators have been at odds with weak GDP growth, which we expect rose just 1.2% at an annualized rate in the fourth quarter of 2012 following an even smaller 0.6% third-quarter gain.?
Many economists expect gross domestic product to growth by round 2% for all of 2013, similar to the Finance Department?s forecast.
The Bank of Canada was more optimistic in its last outlook, pegging this year?s growth at 2.3%. On Jan. 23, policymakers will provide an update on the economy in its quarterly Monetary Policy Report, along with its latest interest rate decision.
The bank?s key lending rate has been stuck at a lowly 1% since September 2010, with policymakers unable to begin hiking borrowing costs with only moderate economic growth, which has been accompanied by weak inflation.
?I think the real challenge for Canada is the rotation of [economic] growth. We need to rotate to where we?re getting more growth from exports and business investment,? TD?s Mr. Alexander said.
?One of the reason growth has been weakening in recent quarters is because that transition has happened very smoothly, because the global economy has been very weak.?
In a separate survey released Monday, the Bank of Canada said was little change in in overall business-lending conditions during the fourth quarter of 2012.
?This follows several consecutive quarter of easing in credit conditions for business borrowers,? the bank said.
Malware Monday First Row Sports American flag Happy 4th of July 4th Of July Desserts fireworks fireworks
No comments:
Post a Comment