Ottawa – The Conference Board of Canada’s index of business confidence nudged higher during the final quarter of 2013, moving from 101.0 to 102.3. While the index only increased 1.3 points in this latest quarter, business confidence in Canada now sits higher than at any point over the past two and a half years.
In the latest quarter, business leaders’ faith in the Canadian economy jumped substantially. Among respondents to our survey, 44% said they believe the Canadian economy will improve over the next six months, up from only 29% the previous quarter. It was the second largest jump in the last three years.
Driving the improvement in business confidence was the rise in the share of respondents who said they expect their financial position to improve over the next six months. The balance of opinion (the percentage who expect their financial position to improve minus the percentage who expect it to worsen) rose to 57 — the highest level since the recovery year of 2010. Although not quite as strong as the responses to the financial position question, a majority of respondents also indicated that they expect profitability to rise.
Investment intentions results did not change much from the previous quarter. Among the respondents, 52% said now is a good time to take on major expenditures on structures, machinery and equipment, compared with 51% the previous quarter. The number of respondents who said the present is a bad time for more investment rose to 19%, up from 16% in the previous quarter, lowering the balance of opinion and holding back the increase in the overall index. Despite this, actual planned investment intentions have risen, with13% of respondents saying they plan to increase their investment levels by 20% or higher. That’s up from 9% the previous quarter. At the same time, the percentage of respondents planning to cut their investment levels has fallen.