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| Canadian businesses predict higher sales, higher employment in coming year |
| Wednesday, July 14, 2010 |
| By: /nipawinjournal.com |
Canadian businesses - the bellwether for the state of the economy - are reporting sales have increased over the past year, according to the Bank of Canada's summer Business Outlook Survey.
It's the first time the business survey has reported increased sales since the recession took hold in 2008.
The survey of senior managers at 100 firms across Canada, which was released Monday, also indicates sales — and employment figures — will continue to increase, if slightly slower than previously projected because of global "uncertainties."
"The results of the summer survey indicate that the economic recovery is progressing," reads the Bank of Canada's report. "For the first time in two years, firms, on balance, reported an improvement in their past sales activity."
Louis Gagnon, an associate professor of finance at Queen's University, said the survey's results are "very encouraging" because they confirm what people had been thinking for many months, that Canada's economic recovery is increasingly on solid footing.
"There's been a sense over the past few months that things were picking up," he said. "But, is this seeming recovery going to persist? Does it have any legs to stand on?
"It (the survey) is certainly an indication that the Canadian economy is on a much more positive path."
Businesses, he said, are on the front line when it comes to the economy, and are a "leading indicator" of its recovery.
"These guys have their tentacles extended throughout the economy and they are basically at the gate," Gagnon said. "They are the folks who see first the manifestations of economic recovery."
The survey also found 95% of respondents believe inflation will be within the Bank of Canada's ideal rate of 2%, with 50% of respondents anticipating inflation between 1-2% and 45% expecting inflation to be between 2-3%.
The Bank of Canada could increase interest rates from the current 0.50% July 20.
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The Business Outlook Survey was conducted between May 19 and June 15.
bryn.weese@sunmedia.ca
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