Business sentiment upbeat, BoC survey says

by Christine on 13/07/09 at 12:08 pm

Canadian business continue to be negative about economic prospects in the coming months, with many expecting an outright decline in sales volumes, the Bank of Canada says in its quarterly Business Outlook Survey.

Canadian business expect better conditions ahead for the economy, and hold positive expectations for sales growth as well as employment, the Bank of Canada says in its Summer Business Outlook Survey.

The turn in sentiment is a dramatic change to expectations taken in Spring, but businesses still foresee a level of difficulty ahead and expect activity to recover gradually.

The quarterly survey found 69% of businesses had reported lower sales in the past 12 months. However, 61% expected sales to rise over the year, compared with just 30% previously.

Pressures on production capacity remained low and few firms faced labour shortages.

“The percentage of firms reporting that labour shortages are restricting their ability to meet demand changed only slightly and remains at a low level,” the survey of 100 businesses found. “A majority of respondents indicated that labour shortages were less intense than 12 months ago, because the demand for labour has declined during the recession.”

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