Ottawa, ON — The confidence of Canadian business leaders has dropped for the second straight quarter, indicating a less optimistic economic climate, according to the Conference Board of Canada. The Board’s Index of Business Confidence (from the board’s Summer 2011 survey results) now sits at 103.7, down from 106.2 last quarter and 109.5 in the fourth quarter of 2010.
While firms remain generally positive on their financial position and profitability, predictions about the future of the Canadian economy have deteriorated sharply. Just 30.9% of respondents believe that economic conditions will improve in the next six months-down from 40.6% last quarter-while the number of respondents who believe conditions will worsen increased 4 percentage points to 17%.
The number of respondents to the survey who agreed that now is a good time to invest in plants or equipment fell almost 10% to 55.3% this quarter.
The Board’s survey indicated that rising costs are becoming more of a problem for businesses, with more respondents reporting that the cost of capital goods was a problem. Similarly, rising labour costs were listed as an obstacle by more respondents than the previous survey. Shortages of qualified staff remain an issue for about 30% of the firms surveyed.
For more information, visit http://www.conferenceboard.ca.