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.
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