Canadian Business Confidence Grew in First Quarter
OTTAWA -- Canadian business confidence has picked up, encouraged by a decline in interest rates and by a drop in the Canadian dollar against its U.S. counterpart.</br></br>The Conference Board of Canada said its index of business confidence rose 16.1% in the first quarter to its highest level since the 1989 fourth quarter.</br></br>The board, an economic research group, said its latest survey of business attitudes showed that 55.6% of business leaders expect Canadian economic conditions to improve over the next six months, up from 37.9% in the 1991 fourth quarter.</br></br>Paul Darby, director of the board's surveys, attributed the improved sentiment partly to a 6% decline in the Canadian dollar against the U.S. dollar in the past six months. The decline boosted the profits of Canadian companies that sell goods priced in U.S. dollars. Noranda Inc., a Toronto natural resources company, said a one-cent decline in the exchange value of the Canadian dollar would increase its 1992 profit by about 21 million Canadian dollars (US$17.6 million).</br></br>Canadian business confidence also has been strengthened by a drop of seven percentage points in short-term interest rates in the past two years, and by the recent pickup in the U.S. economy, which takes more than three-quarters of Canada's exports.