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Western Canada companies less confident than those in the East

The fall in the price of crude has had an impact on some Canadian companies and their sales and investment prospects during 2015. In its most recent survey, the Bank of Canada reveals diminished confidence by companies in Western Canada and more generally companies related to the energy sector. This explains why the optimism of Canadian companies has fallen slightly. We also learn that 43% of companies expect to increase their sales volume over the next 12 months while 35% fear they will see them drop. In the last survey last fall, there was a higher proportion of companies that were confident in their sales level.

The results of this survey by the central bank are based on a survey of 100 business representatives selected on the basis of the composition of the country’s gross domestic product. It was conducted between November 17 and December 11.

The manufacturing sector most optimistic

Concerning the plans for investments in machinery and equipment, the Bank of Canada also notes a decline, since the gap between companies who want to increase their investments (37%) and those wishing to decrease them (29%) went from a positive balance of 20 points to 8 points between the two surveys. There again, the explanation is found in the collapse of oil prices. However, investment intentions seem to be more robust in the manufacturing sector.

In the central and eastern provinces, companies in this sector enjoy increased confidence, especially those related to exports abroad. Bank of Canada analysts explain this level of confidence by the decline of the Canadian dollar and the strengthening of growth in the United States. These companies thus intend to take advantage of the opportunity to recover some market share and increase their competitiveness.

In the future, growth should therefore rely more on the manufacturing sector and somewhat less on the energy sectors, which until now represented two-fifths of investments by Canadian firms.

 

 

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