MNI 5 THINGS:BOC Biz Survey: Biz Sentiment Still Positive>

By Courtney Tower

     OTTAWA (MNI) - Bank of Canada's Spring Business Outlook Survey  

made the following points Monday, highlighting continued positive though 

somewhat reduced optimism for sales growth and capital investment, and 

high intentions for hiring more employees: 

     - The survey of 100 representative Canadian firms' senior 

executives, taken February 12-March 9, found firms expect sales to grow 

at a faster pace over the next 12 months. The balance of opinion, at 16, 

doubled the balance of 8 in the previous survey. Expectations for U.S. 

growth strengthened although some firms cited rising protectionism as a 

factor limiting the impact on their sales, along with lower 

competitiveness.      

     - On planned investment in machinery and equipment, on which the 

Bank of Canada has long depended as a coming pillar of the economy, 

intentions edged down from recent high levels. The balance of opinion 

fell to 24 from 29. But the BOC said investment intentions remain 

"widespread." 

     - Intentions on hiring continued positive, in an environment in 

which the 5.8% unemployment rate is at a record low. The balance of 

opinion on hiring rose to 45 from 40 in the previous survey, with 54% of 

firms expecting to hire more employees. Firms expecting to hire more 

cited a need to support future sales growth, or plans for expansion, the 

survey said. 

     - Firms expecting labor shortages in future dropped from 30% to 

26%. There was a strong 35 balance of opinion that shortages would 

become more intense. The indicator of production capacity pressures 

moderated but remained close to recent high levels. Main problem was 

labor-related constraints. 

     - On inflation, there was a general expectation that inflation in 

Canada would rise, but remain within the Bank of Canada's 1%-3% target 

range. Now, 53% of firms expect it to be in the upper half of the range, 

the highest percentage since the second quarter 2012. Firms cited rising 

labor costs, and, to a lesser extent, minimum wage increases and higher 

prices for  some commodities. 

     MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com 

     [TOPICS: M$B$$$,M$C$S$]