Hiring expectations for Canadian businesses are better than they’ve been in over a decade, says a new report from the nation’s central bank, which charts employment expectations since 2001.
“The balance of opinion on employment has increased and is at the survey high,” says the Bank of Canada’s summer 2012 Business Survey Outlook.
“Firms often cited intentions to hire over the next 12 months in order to meet expected sales growth or as part of new plans or projects,” says the report, pointing to particular interest among smaller organizations. “Intentions to increase employment, while widespread across sectors and regions, are concentrated among small- and medium-sized firms.”
59 Percent Plan to Hire
“The most encouraging reading is on hiring intentions, with 59 percent of firms saying they plan to hire additional workers in the next 12 months, as opposed to only 6 percent that plan to cut jobs,” says a Canadian Press analysis on the findings. The much-watched quarterly survey, released this week, reveals a Canadian business sector “that is wary about the renewed uncertainty and risks over the global outlook, but mostly confident they will be able to cope,” says the news analysis.
A total 35 percent of Canadian firms surveyed said they expect their level of employment to remain the same over the coming year, with only 6 percent predicting a lower level of employment over the next 12 months.
“Many firms are investing in order to respond to competitiveness challenges by expanding into new markets, developing new products or improving productivity,” the survey findings state.
Bank of Canada’s summer survey was conducted between May 22nd and June 14th. The European debt crisis is likely the culprit in some tightening of credit conditions also cited in the new report, which states, “By a narrow margin, the survey responses point to some tightening in credit conditions over the past three months," following a broad-based easing in the spring survey.
On the other hand, the Bank of Canada notes: The firms reporting less-favorable terms and conditions for obtaining financing were primarily small- and medium-sized, often attributing the change to firm- or sector-specific factors.
“Large firms generally continued to indicate that credit conditions had eased.”
Small Business Owners Less Likely to Hire
Some experts feel the report is overly positive given the economic climate.
Doug Porter, deputy chief economist for BMO Capital Markets, noted that the latest hiring intentions reading matched very strong results a year ago, but that hiring mostly stalled in the aggregate during the last six months of last year.
BMO Capital Markets released its own hiring intentions survey last month, showing that only 46 percent of 500 small Canadian businesses plan to hire new employees this year, while slightly more do not have plans to add additional staff this calendar year. Of course, that was a survey of small businesses only.