Firms pessimistic, consumers less so
Canadian businesses are feeling the squeeze of the tough global economy.
The Bank of Canada released a report Monday on its winter survey of Canadian companies. It indicates firms across Canada are feeling pessimistic in the face of Europe's ongoing financial turmoil and the weak economic recovery in the United States.
"Firms in western Canada expect sales growth to slow from the recent strong pace, and those elsewhere generally expect growth to remain modest," the report states.
Still, companies in western Canada report doing better than their counterparts in the central and eastern provinces, though firms across the country expect a period of soft economic growth.
Companies also expect consumer confidence and spending to be slower in the coming months.
Businesses are also reporting an increased credit crunch in the last financial quarter.
"An increase in borrowing costs was the most commonly cited reason for a tightening in credit conditions," says the report.
There is some good news on the horizon, however, with companies - especially those in the Prairie provinces - saying they're more likely to hire new workers this winter.
More good news comes from another poll, also released Monday, that says consumers are not predicting the same doom and gloom they were a few months ago.
"As we enter 2012, consumer confidence is steady and the pessimism in terms of the first six months of 2012 is not as strong as the previous quarter," said pollster Nik Nanos. "Cautious yet not as negative would be the key hallmarks of opinion related to the economy."
Asked in December to predict changes in the country's economy over the next six months, 18.9% of respondents said it would get stronger -- that's up by 2.3% from a survey in the fall. Nearly a third (31.3%) still think the economy will get weaker, but that number's down 7.6 percentage points.
Canadians' views on real estate are also looking up, with 36.3% predicting the value of property in their neighbourhoods will increase over the next six months -- up 4.6% -- and fewer believing values will drop (12.1%, down 1.5 percentage points).
The credit crunch felt by businesses is not extending to consumers: just 17.7% of respondents are expecting to see their debt levels rise, whereas 33.7% believe they will put a dent in their debt in the coming months.
Anxieties about job security, however, are getting worse.
Just more than half of Canadians, 52.2%, feel their jobs are secure, relatively unchanged since the fall survey, whereas 11.6% believe they could lose their jobs in the near future, up 1.3 percentage points.
For its consumer poll, Nanos Research surveyed 1,201 Canadians by phone between Dec. 15-18. The results are accurate within plus or minus 2.8 percentage points, 19 times out of 20.