Potential Turnaround Looms in Canadian Economy

An index of Canadian business confidence has risen higher for the second straight quarter.  The Conference Board of Canada’s business confidence index sits at 101.8 for the first quarter of 2012, up 2.5 points over the fourth quarter of 2011.  The fourth quarter of 2011 was up 6.6 points over the third quarter of 2011.

Over 50 percent of business leaders surveyed expected to see the improving economic climate reflected on their company’s balance sheets.  However, this optimism may not necessary translate into action because 27 percent of respondents are still uncertain whether it is a good time to invest in a plant expansion or new machinery.  According to the respondents, excess capacity (10 percent) and weak demand (35 percent) are the leading factors that discourage investment.

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