Business confidence in Canada falls to lowest levels since 2009
Ottawa – The Conference Board of Canada’s business confidence index edged down to 86 – marking the fourth consecutive quarter of declines and hitting a 27-quarter low.
“The results suggest that Canadian business leaders continue to feel the pressure of chilling headwinds from global commodities markets,” said Matthew Stewart, Associate Director, National Forecast. “However, it appears firms are growing more optimistic about the future and believe that the economy may be turning a corner.”
Among firms surveyed, 91 per cent said they believe that economic conditions in Canada will remain stable or improve over the next six months, compared with only 56 per cent in the previous survey.
However, firms remain pessimistic about their financial position. At the end of 2015, corporate profits at the national level had fallen to two-thirds of their pre-recession level. Reflective of the current climate, 54 per cent of firms expect their financial position to worsen over the next six months and only 26 per cent of firms expect profitability to improve in the next two quarters.
With favourable financing conditions persisting and prime lending rates stable at near-record lows, Canadian businesses plan to invest for future productivity. Nearly 44 per cent of firms surveyed plan to expand plant facilities and/or boost machinery and equipment purchases, compared with 35 per cent in the last survey. In addition, the share of business leaders who expect their firms to cut investment over the next two quarters fell to 20 per cent, a significant improvement from the nearly 30 per cent that responded similarly to our Autumn 2015 survey.
For more information, visit conferenceboard.ca.