Firms Remain Cautious About Investments In Canada

Take a look at the Latest Investment Scenario In Canada. With the first quarter of FY16 concluded in a turbulent market scenario, Canada has been able to hold itself steady, relatively though businesses are taking cues from the slowdown of global demand and are being cautious when it comes to considering new investments. The service sector seems to be optimistic though the energy sector is anticipating a slowdown in demand. The reason is the weak prices ion the commodity sector. This is as per the findings of a survey by the Bank of Canada. Business sentiment remains low as commodity prices are weak and this in turn is weighing on the firms and affecting their decisions to invest further. Take A Look at this article on Alternative Investment Opportunities You Need To Know.

The central bank of the country issued the business outlook survey for the quarter, which indicated that the investment plans for the firms remained on the cautious side. Many businesses which operate in the energy sector are anticipating that their demand forecasts might be amended on the lower side. The service sector, however, showcased an optimistic picture for the future and the investment plans for the same. Domestic demand is predicted at modest levels overall. Key factors as foreign demand and uncertainty in foreign markets is holding back the investors when it comes to taking the plunge to increasing work and investments in different sectors.

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The central bank, however predicted that the next 12 months will see acceleration in demand and sales will grow. The businesses in areas like Saskatchewan and Alberta are seeing recovery after the oil price fall that was experienced. The regions that are not too dependent on the energy sector have reported a modest improvement in demand. The findings are on the basis of a survey conducted in the early parts of May and June. This was before the UK vote occurred on whether it would stay or leave the European Union. The central bank has found that businesses are expecting sales to accelerate at a faster pace next year, though the predictions have also gone down, from 48% to 43%.

The economists are quick to point out that the global economy being in an uncertain state, this has an effect on the Canadian economy as well. The energy prices having fallen and still on their way to recovery would have a negative impact on businesses. Hence, businesses are staying on hold, remaining steady with the growth rate that they see which not enough to predict a growth in investments is. The central bank had reduced the interest rates twice last year. This was in response to the negative effects as oil prices fell. This is a major resource for the businesses here and the business sector has been cautious since then. Hiring intentions remain the same, but there is no upbeat change predicted. The addition of jobs is expected to remain the same without a sharp rise or increase. Service sector would be adding on more than the energy sector.


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