Optimism mirrors different levels of growth across the country, says BMO Economics
A national study released recently by BMO reveals 44 percent of Canadians surveyed are optimistic that businesses in their community will experience growth this year, while eight percent see local business activity shrinking.
“These survey numbers show that Canadians are cautiously optimistic about the economy and the growth prospects for businesses in their home communities,” says BMO Bank of Montreal Commercial Banking Vice-President Cathy Pin.
“In this current economic environment, we encourage businesses to take advantage of the opportunity to make strategic spending and investment decisions – such as upgrading equipment, training and processes – in order to improve productivity and better position themselves for a future strengthening in consumer confidence.”
The survey, conducted by Leger Marketing, shows higher levels of optimism about local business growth in Western Canada (Manitoba/Saskatchewan at 55 percent, Alberta at 53 percent, and British Columbia at 49 percent) compared to Quebec at 37 percent.
“The differences in optimism reflected in the survey mirror the different levels of economic growth across the country,” says BMO Capital Markets economist Robert Kavcic. “Optimism is highest where we project the strongest growth, such as in Saskatchewan and Alberta, with lower levels reflecting below-average economic growth in Ontario and Quebec.”
According to BMO Economics, the Canadian economy has shifted from the recovery phase to a more mature expansion, with real gross domestic product now expected to grow a moderate 2.8 percent, before easing to 2.6 percent in 2012. At the regional level there is a clear divide between the commodity-producing provinces and non-commodity provinces, with Western Canada and Newfoundland & Labrador expected to grow from three to four percent this year, Central Canada growing slightly below three percent and Atlantic Canada at around two percent.
Key survey findings for each region:
- Growth in British Columbia is expected to be three percent this year and slightly higher in 2012.
- 49 percent in British Columbia believe businesses will grow (38 percent stay the same, nine percent shrink).
- Alberta’s growth is expected to be among the strongest in the country, at 3.6 percent this year and 3.4 percent in 2012.
- 53 percent in Alberta believe businesses will grow (41 percent stay the same, five percent shrink).
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