Business confidence nearing record high Majority of executives expect growth, a need to hire, BoC survey finds

OTTAWA–Canadian businesses reported near record optimism about their future sales and say they are stepping up plans to hire more workers and invest, the Bank of Canada said Monday.

Seventy per cent of executives said sales growth will quicken over the next year, while another 21 per cent expect it to slow, the bank said in a quarterly Business Outlook Survey. The gap of 49 percentage points is close to 53 in the last survey, the biggest since the question was first asked in 1998.

Executives on balance said for the second quarter since mid-2007 that credit conditions had eased. Twenty-six per cent of executives said loans were easier to get, compared with 13 per cent who said they were harder. In the last report, the gap was four percentage points.

The survey indicated that terms have improved more for large companies, with some small firms still facing tighter lending terms.

Executives also predict slower inflation over the next two years, and on balance plan to buy equipment and hire workers.

On hiring intentions, 54 per cent of the 100 firms surveyed by the bank said they planned to add employees in the next year, as opposed to only 14 per cent that said they expected to reduce staff.

The balance of opinion on adding to payrolls in the next year was 40 percentage points, the highest since the first quarter of 2007. For investment in machinery and equipment, the balance of opinion was 17 percentage points, the highest since the third quarter of 2008.

In a news conference in St. Boniface, Man., Finance Minister Jim Flaherty said he was encouraged that both consumer and business confidence were improving but added that dangers remained.

"The economy is still recovering ... (but) has not recovered," he said.

TSX falls short as energy shares decline

Last Updated: Monday, January 11, 2010 | 06:16 PM EST

Financial Post

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The Toronto Stock Exchange closed Monday’s session just short of flat as positive news out of China was offset by forecasts for milder weather in the U.S. in the coming weeks, the latter of which hurt the energy sector.

The S&P/TSX composite index was down 6.7 points, or 0.06%, to 11,947.13. The most positive sectors were materials, telecommunications and consumer discretionary, while the biggest sectors, energy and financials, kept things in the negative.

The biggest detriment to the TSX index was Talisman Energy Inc., which was down 3.55% to $19.85. The most positive factor to the benchmark was Toronto-Dominion Bank, which was up 0.71% to $64.18.

Just after Monday’s open, the TSX benchmark index surpassed the 12,000 threshold, a level not seen since September 2008 when markets were in a downward spiral that would see it going almost as low as 7,500 by March.

The TSX Venture composite index was up 3.42 points, or 0.21%, to 1,608.53.

A number of markets around the world gained strength after news that Chinese exports rose for the first time in more than a year, with the December figure up 17.7% compared with last December. Imports surged 55.9% for the year — the strongest increase since February 2004.

Closer to home, Canada Mortgage and Housing Corp. said December housing starts rose 5.9% to an annual rate of 174,500 units in December. That beat expectations for between 160,000 and 165,000.

Statistics Canada, however, said the value of building permits fell in November by 4.6% from the previous month to $5.9-billion.

North American investors will soon be weighing their portfolios against a slew of corporate results as the fourth-quarter earnings season gets underway. Alcoa Inc. reported results after the close on Monday that trailed analysts’ forecasts. Earnings from Intel Corp. are due Thursday and JPMorgan Chase & Co. is scheduled to report Friday. Most major Canadian companies will not start releasing earnings until the latter part of the month.

“Equities have been advancing ahead of earnings season, which suggests that there may be more optimism this time around, particularly since confession season has been eerily quiet with very few profit warnings,” Colin Cieszynski, an analyst with CMC Markets Canada, said in a note. “This suggests that either companies are fairly confident about meeting forecasts or we may be in for a few surprises.”

On the New York Mercantile Exchange Monday, crude oil was down 23 cents to US$82.52 a barrel, after being up earlier in the day. Natural gas took a beating on U.S. weather forecasts, falling 29.5 cents to US$5.454 per million BTUs. Gold was up $12.50 to US$1,151.40 an ounce.

The Canadian dollar was down 24 basis points to 96.76 cents US.

U.S. markets were mixed. At the close, the Dow Jones industrial average was up 45.8 points, or 0.43%, to 10,663.99, helped along by industrial stocks after the China data came forth. The Nasdaq composite index was down 4.76 points, or 0.21%, to 2,312.41, indicative of profit-taking after this measure hit a 16-month high on Friday.

Most of the main European and Asian markets were up Monday, except in France, where the CAC index was down 0.5%.