Business Development Bank of Canada says there are reasons to be optimistic
Investment intentions remain broadly positive among Canadian entrepreneurs despite concerns about global economies.
Exporters are more optimistic than those with a domestic focus according to a survey from the Business Development Bank of Canada released this week.
Those businesses in the manufacturing and services sectors are more likely to say they see sales increasing this year with hiring intentions to match.
"Canadian entrepreneurs will keep investing in their companies despite international uncertainty and lower global growth,” said Pierre Cléroux, BDC's Vice President Research and Chief Economist. “There's reason to be optimistic: at the end of 2019, the United States, Mexico and Canada signed a new free trade agreement, reinstating favorable conditions for Canadian products and services."
Business owners will invest in technology, marketing, intellectual property, and employee training, in line with a move towards a digitized, services-based economy.
But investment in tangible assets including real estate, machinery, and equipment is expected to decline, as has been the trend in previous BDC surveys.
Where sentiment is strongest
The survey was conducted in the fall of 2019 and shows that investment intentions are highest in Ontario and Quebec where manufacturing, technology and services are the strongest sectors.
However, they are declining in British Columbia where spending intentions on machinery and equipment have significantly decreased. Overall, business owners are the most pessimistic in the Prairies, mostly because of low commodity prices and limited cash flow.
There is also concern about labour shortages, especially in Quebec where this issue is likely to limit investment.