OTTAWA ? Sales by Canadian companies were stagnant at the end of last year amid signs of a weakening economy, but the outlook for future business activity has picked up, according to a quarterly survey by the Bank of Canada.
?Responses to the winter survey provide further indications that firms have faced a period of softness in economic conditions,? the central bank said Monday.
?While some forward-looking indicators of business activity have moved up from levels recorded in the autumn survey, many firms cited concerns about demand over the next 12 months, as well as pressures related to increased competition.?
The survey found 35% of companies reported a weaker rate of sales growth over the past 12 months, up from 27% in the autumn report.
However, the sales outlook for the next 12 months improved, with 44% expecting faster growth.
That compares with 35% in the previous survey, ?reflecting the efforts of some firms to generate higher sales growth . . . by pursuing new business opportunities or adopting strategies to maintain market share in a challenging ?demand? environment,? the bank said.
?These firms were most often in the manufacturing sector, or in central and Eastern Canada, where a number of firms also reported facing higher-than-desired inventories.
The investment picture also improved in the fourth quarter of 2012, the survey found, with 43% of companies saying they plan to increase spending over the next 12 months ? up from 37% previously.
Still, hiring intentions were little changed.
The Bank of Canada surveyed about 100 companies between Nov. 10 and Dec. 13.
BMO Capital Markets economist Benjamin Reitzes said the survey was conducted while ?worries about the U.S. fiscal cliff were stirring, likely weighing on the outlook.?
?Some better data over the period (employment in particular) may have provided a bit of an offset, but not enough to alter the anticipated lacklustre underlying picture,? Mr. Reitzes said in a note to investors ahead of the Monday?s results.
In a separate survey released Monday, the Bank of Canada said there was little change in overall business-lending conditions during the fourth quarter of 2012.
?This follows several consecutive quarter of easing in credit conditions for business borrowers,? the bank said.
The survey of senior loan officers was conducted between Dec. 10 and 14.
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