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Canadian firms ramp down hiring and investment intentions as economy struggles

Bank of Canada Governor Stephen Poloz speaks to the Vancouver Board of Trade in Vancouver, on September 18, 2013. Canadian firms are turning progressively gloomier about the slow pace of the world's economy and say they want to see signs of progress before ramping up hiring and investment, a new Bank of Canada survey suggests. THE CANADIAN PRESS/Jimmy Jeong
October 11, 2013 - 7:31 AM

OTTAWA - A new business outlook survey from the Bank of Canada offers little comfort to those hoping for a quick turnaround in the country's sluggish economy.

The bank says its survey has found that many Canadian companies are refusing to commit to new investments in either equipment or new employees until they see more improvement in the economy.

It says most were generally optimistic that sales will pick up over the next 12 months, but that was largely because they saw the growth of sales deteriorate over the previous 12.

However, there is some positive news in the quarterly sampling, including that more companies are reporting labour shortages and say they would face difficulty meeting an unexpected increase in demand for their products.

But the overall tone of the survey of 100 selected firms shows Canada's business leaders are taking a cautious approach — planning to invest and hire only after they see the economy and demand pick up.

On the key question of investment intentions, only 34 per cent said they expect to hike spending on new machinery and equipment, while almost as many — 27 per cent — said they planned to spend less in the upcoming 12 months. The positive seven-point balance is the lowest in four years.

News from © The Canadian Press, 2013
The Canadian Press

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