Bank finds businesses getting more cautious
San Francisco, CA -- (SBWIRE) -- 10/16/2012 -- Canadian businesses are more worried about the future than they were three months ago, and they are planning for hard times, according to a survey by the Bank of Canada.
Leading executives at 100 companies throughout Canada are reining in expectations for investments, hiring and sales, the quarterly survey found.
Companies and loan officers said credit conditions were easing, but it is unclear whether businesses will be able to benefit.
Businesses are focusing on cutting costs, according to a report by The Canadian Press in the weekly current affairs magazine Maclean’s.
“The results of the autumn survey suggest that, in an environment of slow global economic growth and uncertainty about demand, firms have tempered their expectations for business activity,” the bank stated. “Firms are generally more circumspect about near-term investment decisions.”
The feeble global economy was an important factor in the economic outlook, and businesses that operate on the world stage, especially manufacturers, tended to be more pessimistic about future sales.
Business leaders, however, found a source of hope in the demand for commodities and the consistent domestic economy, the bank said.
Executives were less optimistic overall than they were three months ago, the survey found. Opinions were divided about whether sales would pick up in the next year, but this is the second time since 2009 that the forecast was not positive.
About 37% expected to ramp up investments over the next year, and 29% planned to decrease spending.
“Intentions to increase employment softened in all regions,” the bank said. “A number of firms cited productivity gains from recent capital projects, efforts to reduce costs or demand conditions as factors influencing their hiring intentions.”
The bank will reveal its monetary policy moves next week, and the survey is anticipated to factor into the institution’s decisions. Many observers expect interest rates to remain unchanged.
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