Canadian manufacturers see sales rising in the first quarter of this year and fewer impediments to production, but their overall outlook remains largely negative, a Statistics Canada survey showed on Monday.
According to the quarterly survey of 3,000 firms in early January, 25 percent of those surveyed saw new orders rising in the first quarter, up dramatically from 10 percent in the fourth quarter. Those expecting a decline in new orders were unchanged at 23 percent. "This was the largest quarter-to-quarter increase in balance since a 35-point jump in the April 2002 survey," Statscan said.
Despite improved readings on production levels, unfilled orders and employment, the balance of opinion remained negative as firms struggle with a strong Canadian dollar, rising foreign competition and lack of skilled labour.
Eighteen percent of the manufacturers surveyed expected production to increase in the first quarter from 16 percent in the previous quarter. However, 23 percent expected a decline and 49 percent saw no change in output. Statscan said manufacturers' woes in Ontario and Quebec offset optimism in other regions.
The most pessimistic note in the survey related to firms' concerns about inventories. Some 20 percent felt inventories were too high, up from 14 percent in the fourth quarter. The Bank of Canada said in its monetary policy report this month that Canadian auto firms had largely adjusted their inventories in reaction to a slowdown in the US market.
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