Canadian businesses show increased optimism: Bank of Canada

Ottawa, April 10 (IANS) Canadian businesses plan to increase investment and hire more staff because positive sentiment on future sales has risen to its highest level in two years, the Bank of Canada's spring survey for business outlook showed.

The bank conducted interviews with senior managers at about 100 major companies from Feb 21 to March 15.

The "balance of opinion" on expectations for future sale, calculated by comparing the percentage of companies expecting faster growth minus the percentage expecting slower growth, rose to 22 percent from -4 percent in last winter's survey. The bank noted this was the most optimistic score since the first quarter of 2010, reported Xinhua.

Managers were confident that their business situation would improve next year, with 58 percent saying that they expected sales to grow at a faster pace in the next year than in the past year. In the winter survey, only 37 percent thought their sales would improve.

The survey found some businesses are concerned about inflation, with 63 percent of business owners and managers believing inflation will be in the upper half of the central bank's inflation-control range of 1 to 3 percent.

The survey found fewer labour shortages than expected and a lower amount of strain on capacity than the bank has been predicting. It found that 39 percent of businesses would have difficulty coping with an unexpected rise in demand, down from 46 percent in the bank's previous survey.

"Some firms, notably those in the services sector, reported that they could accommodate higher demand because of earlier investments to expand capacity or because they have flexibility in adjusting the scale of their operations," the bank said Monday.