The Conference Board says business confidence materially improved during the spring months this year, and more importantly firms are preparing to boost investments.
The think tank says business confidence index jumped to 101.5 during the second quarter, the highest level in more than a year and a big increase from the 91.3 reading in the first quarter.
On Thursday, the Canadian Federation of Independent Business also reported a surge in confidence among its members, which tend to be small and medium-sized businesses.
The Conference Board says its survey found executives were becoming more encouraged about the near-term prospects for their firms and for the economy as a whole.
The result is not surprising given that many economists expect the economy to begin picking up during the second half of the year as the recovery in the United States – Canada’s largest trading partner – becomes more entrenched.
More critically, many executives said they expect to increase investment spending substantially in the near future.
Among the factors for the boost in sentiment was that almost half those surveyed believed their firm’s financial position will improve in the next six months, with only 6.1 per cent anticipating a worse financial position.
The survey was conducted in a four-week period between May and June.