Too early to break out the champagne, but …

Survey results show business sentiments are looking up

By Paul Marck

This week’s release of the Bank of Canada’s business outlook survey could not be more timely, as it arrives just as the quarterly season gets underway. While this survey does not generate a lot of detail, it is encouraging. The fact that companies report higher sales activity — 49% of respondents say sales volumes increased over the same period last year — suggests that corporate Canada is climbing nicely out of the trough. Plus 53% expect sales volumes to rise at a greater rate in the next 12 months.

Other signposts that things are getting better include optimism over hiring and expectations that firms will increase their investments in machinery and equipment. Sure beats the defensive posture that Alberta and Canadian companies took last year in the midst of the recession. The B of C survey, besides carrying an air of authority, validates the whispers we have been hearing since early this year. Nobody predicts a return to boom times — the comforting words everyone wants to hear are “slow steady growth” — the survey reflects an air of optimism.

A double-edged finding in the B of C survey suggests that 39% of firms feel they would have some or significant difficulty in meeting an unexpected increase in demand for products or services. Better than contemplating a reduction in head count or yarding back production.

This, like any other survey, is a snapshot in time and a picture of business conditions towards the end of the second quarter. For instance, Alberta Venture is canvassing business leaders for a business sentiments survey to be published in our October issue. For me, it will be a fascinating exercise to contrast those results with these earlier findings, to see if one builds upon the other, or whether there is departure in perceptions by fall.

BTW, if you are interested in participating in the business sentiments survey, click here.

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