Canadian companies losing confidence: Conference Board

Business confidence in the economy is falling like the winter snow, according to a survey by the Conference Board of Canada.

The Ottawa based think-tank found nearly 60 per cent of companies anticipate the economy will deteriorate in the next six months and only 24 per cent think their own company's financial position will improve.

The survey was taken in the first three weeks of January and shows a high number of businesses operating under capacity.

For the first time since the recession of the early 1990s, more than 60 per cent of the businesses surveyed said they were putting off purchasing new equipment or expanding because of weak market demand.

Finding credit remains a problem, according to the survey. The board said even viable businesses complained they found it difficult to borrow money under acceptable conditions.

The Index of Business Confidence stands in contrast to the Conference Board’s index of consumer confidence, published on Monday.

It reported consumer confidence rose 2.5 points to 70.2. It added, however, that the level remains consistent with those seen during other times of economic recession in Canada.

"Although consumers continue to expect unfavourable employment conditions in their communities six months from now, they did indicate that they believed their financial situation was beginning to improve," the board said in a commentary.

"Moreover, for the fourth consecutive month, a greater number of respondents said now was a good time to make a major purchase."

The survey was based on 2,000 telephone interviews conducted in early January.