Maybe it’s a sign that businesses in Canada feel more confident about our (near) future economic recovery.
Once a year Statistics Canada canvasses both public and private organizations as to their capital spending intentions for the upcoming year (referred to as the private and public investment intentions (P&PI) survey), and the results are somewhat encouraging.
Private enterprises intend to increase non-residential investment spending by a solid 7.6% in 2012, up from a 12.0% gain in 2011.
Public investment is expected to rise 6.3% in 2012 after a minimal 1.1% gain in 2011 which results in an overall increase in capital spending (including residential investment) of 6.2% in 2012 that is down slightly from the 6.9% gain in 2011.
Canada’s largest bank, the Royal Bank, issues similar projections and finds that the increase is generally consistent with its current forecast of the volume of business investment rising 5.5% this year, relative to RBC’s current monitoring of an 11.7% increase in 2011.
"If there is a risk to this outlook for business investment," the bank goes on, "it is on the upside. The survey tends to understate spending in periods of expansion and overstate spending in periods of declining growth."
The increase in overall capital spending is expected to be led by gains in mining and oil and gas extraction (17.7%), transportation and warehousing (21.5%) and utilities (21.5%). Investment in manufacturing is expected to rise 6.6% following a 21.5% surge in 2011.
Regionally, the increase in overall capital spending in dollar amounts was led by gains Alberta (10.3%), British Columbia (10.1%), Quebec (5.6%) and Newfoundland and Labrador (26.9%).
