15 April 2008

 

 

 

Bank of Canada released its Business Outlook survey results today [14 April].

 

… - Overall, 36% of firms expect greater sales volume over the next 12 months,26% see no change, and 38% expect sales to decline compared to the previous12 months. 

 

-        Firms' intentions regarding investment spending on machinery and equipment(M&E) remain positive but weaker compared to recent quarters. Overall, 28% of firms expect to boost investment in M&E over the next 12months. About 45% of firms expect their M&E spending to remain the same and 27% expect to invest less compared to the previous 12 months. Most of the firms planning to invest less are in Central and Eastern Canada. Firms located in Western Canada generally expect to increase investment over the next year.

 

-        45% of firms expect their level of employment to be higher over the next12 months; 43% about the same; and 12% lower. The balance of opinion is positive for all sectors except manufacturing.

 

-        Pressure on production capacity has fallen from recent highs. 44% of firms reported "some" or "significant" difficulty in meeting an unexpected increase in demand compared to 60% in the fourth quarter of 2007. Capacity constraints remain high and little changed in Western Canada. 

 

-        30% of firms reported labour shortages that restrict their ability to meet demand, down from 41% during the previous quarter. All regions reported a decline. Labour shortages continue to be more pronounced in Western Canada, particularly in B.C.

 

-        - 42% of firms expect their input prices to increase at a greater rate over the next 12 months than they did over the past 12-month period. This reflects record high oil prices at the time of the survey, high food prices and rising prices of imports from China. About 40% of firms think input prices will increase at the same rate and 16% believe input priceswill increase at a s