Canada Business Investment Looks Unlikely to Take up Economic Slack
WSJ February 27, 2013, 9:20 AM
"The Bank of Canada’s hopes for business investment to do the heavy lifting for the economy just got dented.
According to data released Wednesday from Statistics Canada, capital spending plans will probably grow at the slowest pace this year since the recession.
Total private and public sector investments will probably rise a meager 1.7% to 398.18 billion Canadian dollars ($387.94 billion), following a 7.2% gain in 2012, according to a survey by the statistics agency. Private investment is expected to edge up just 0.8%–the slowest in four years– while public spending will probably grow 5.0% to C$87.99 billion, from 4.9% previously.
Of the private-sector total, investment on housing will probably edge up 0.2%, the smallest gain in four years. Investments in the mining and oil and gas sector will probably fall 2.7%, the first decline since the recession, primarily from a 32.1% slump in metal ore mining. The survey polled 28,000 private and public organizations late last year and early this year to gauge their spending plans.
“Generally speaking it suggests that the mood among businesses is very grim, and it’s logical given all the risks out there in the world,” says Jimmy Jean, economic strategist at Desjardins Capital Markets in Montreal. In particular, the expected decline in spending plans in mining and oil and gas is “really depressing,” he said."