Ottawa - After increasing by 11 points during 2013, the Conference Board of Canada’s business confidence index continued to edge up during the first half of 2014. This upward trend continued in the second quarter with the index rising almost 2 points to 104.9, the highest level since early 2011.
Despite the rise in business confidence, Canadian firms were less upbeat about the overall near-term strength of the economy, with the percentage of businesses expecting a brighter future down by 6.1 percentage points in the second quarter to 38%. However, those with a pessimistic view also declined, from 4.2% to just 1.9% -- down drastically from the early-2013 level of 24.4%. Although the balance of opinion on this question edged down, it remains at a high level compared with recent history.
When asked whether now was a good time for investment in the plant or equipment, 57.4% of companies responded positively, up from 53.1% in the previous survey. The percentage of those responding negatively was down 2.5 percentage points to 15.7%. This shows an improvement in the balance of opinion on the question for four of the past five quarters.
These results were consistent with the results of the next question, when companies were asked about the actual change in capital investment planned over the next six months. While the proportion of those planning on major investment (up 20% or more) was small at 7%, overall, 67.8% were planning an increase in capital spending, which was up from 55.5% last quarter.
The survey was completed in June.