UPDATE 1-Canadian business capital spending growth seen stalling in 2013

Wed Feb 27, 2013 11:03am EST
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* Private sector investment to grow 0.8 pct; public 5.0 pct

* Worst rate since economic downturn of 2009

* Mining, oil and gas biggest contributors to slowdown

* Economist sees shortage of drivers for growth

By Randall Palmer

OTTAWA, Feb 27 (Reuters) - Canadian businesses hardly expect to boost their capital spending at all this year, despite hopes by the Bank of Canada for a good contribution to growth from fixed investment.

Statistics Canada said on Wednesday its survey showed the private sector anticipated investment in construction and machinery and equipment would rise 0.8 percent, the worst rate since a 16.4 percent decline in 2009. In 2012 such spending rose 7.8 percent.

The figure includes a planned 0.2 percent increase in housing construction by businesses and individuals, Statistics Canada analysts said. Excluding housing, private sector investment plans are expected to grow 1.1 percent.

The biggest contributor to the slowdown will be a 2.7 percent decline in investment by the mining, oil and gas extraction sector, which accounts for more than a quarter of all private-sector investment.   Continued...