Report But upcoming boom could keep New Brunswick generating investment, says official

Stumble Upon

del.icio.us

Digg

Facebook

Print

Email

Speak Up

Investment intentions among Canadian businesses have fallen to the lowest level in a half-decade, but New Brunswick is set to weather the storm for a while, assured one provincial business leader.

The Conference Board of Canada said Thursday its investment intention index dropped for a fourth-consecutive quarter in the second quarter of 2008.

"We use this index to measure index fluctuations six months from now," said Matthew Stewart, senior economist with the Conference Board of Canada, an Ottawa-based think-tank.

The survey of business confidence was conducted over the last three weeks of June. Company heads from across Canada were asked about their expectations of future profit, future investment and capacity constraints. Atlantic Canadian executives made up about 12 per cent of survey respondents, Stewart said.

The Index of Business Confidence fell by 4.8 points to 91.5 points in the second quarter of 2008, bringing the index to levels not seen since 2003.

Stewart said it is not surprising that the index has indicated a weakening in business confidence.

"The reason it has taken such a hit over the last year even though businesses are doing well here is that they are looking toward the states. The slowdown there is expected to affect market demand here," said Stewart.

Bob Manning, chairman of Enterprise Saint John and the Benefits Blueprint project said that while New Brunswick "is not immune to world market forces," the upcoming boom involving the possible construction of a second refinery could keep generating investment.

"We've got some projects here that are being assessed. They are already identified. I think investors will be looking to the region to see how these projects are going. It's like with the LNG project, when that was locked and loaded it generated a lot of investment. So I think we will continue to have a lot of investment in this region," Manning said.

The board's report said businesses across Canada were of the opinion that Canada's domestic economy will ease from the frenzied pace witnessed over the past half year.

"The fallout from the meteoric rise in oil prices is having mixed effects on Canada's business community," the board's report said.

"Some business will have to deal with a further escalation in costs, not to mention the effects that higher energy prices will have on domestic and global demand for their products.

"Overall, the balance of opinion on whether now is a good time to undertake investment fell sharply in the second quarter of 2008."

Business leaders became more pessimistic about their near-term financial position in the second quarter of 2008, the report said.

Those companies that expect their firm's financial situation to worsen shot up from 16.5 per cent in the previous quarter to 21.5 per cent. The number who expect economic conditions to worsen rose from 50.7 per cent to 53.2 per cent.