October 7, 2016 / 2:38 PM / in a year

Bank of Canada third-quarter survey says investment, hiring intentions rose

OTTAWA, Oct 7 (Reuters) - - Canadian companies’ hiring and investment intentions improved modestly in the third quarter, while resource firms believe the sector may be bottoming out after prolonged weakness, the Bank of Canada said on Friday.

A man is reflected in a window while walking past the Bank of Canada office in Ottawa, Ontario, Canada, May 25, 2016. REUTERS/Chris Wattie

Expectations of sales growth over the next 12 months also improved modestly from the weak level seen in the previous survey. Still, the balance of opinion suggested that sales growth over the past 12 months had been flat.

Many resource-related businesses, including oil and gas companies, said they sense that activity has hit a bottom after two years of grappling with the impact of lower oil prices.

With the relative stabilization in commodity prices in recent months, firms now cautiously believe sales will no longer fall or will increase modestly, the survey said.

Foreign sales were expected to gain momentum in the coming year, supporting the outlook for exports, which is a key part of the Bank of Canada’s economic view.

Employment intentions improved from the low levels seen in recent surveys, with close to half of companies in the survey saying they intended to add positions over the next year.

Firms’ intentions to invest in machinery and equipment also rose, though the scale of investment appears limited overall, the survey said. Companies that were nearing capacity limits were more likely than others to plan expansions.

Reporting by Leah Schnurr, editing by Kaven Baker-Voakes leah.schnurr@tr.com; +1 613 235 6745

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