Overview

According to Statistics Canada, Canadian companies and organizations are projected to experience a slowdown in capital spending in 2024 compared to previous years. This can be attributed to the impact of high interest rates on economic activity.

Planned Expenditures

The annual survey indicates that planned expenditures on machinery and equipment, as well as nonresidential construction, are expected to increase by 4.5% to 354 billion Canadian dollars in 2024. This represents a deceleration from the significant 13.4% growth in 2022 and an expected 8.2% increase in 2023.

Private-Sector vs. Public-Sector Spending

Private-sector capital spending is forecasted to grow by 4.8% in 2024, exceeding the projected growth rate of public-sector outlays on machinery and nonresidential real estate, which is estimated at 3.9%.

Impact of High Interest Rates

The slowdown in capital spending aligns with findings from business confidence surveys, such as the Bank of Canada's fourth-quarter business-outlook survey. The survey reveals that firms are cautious about near-term sales outlook due to the negative impact of high interest rates, resulting in modest investment intentions and weak hiring plans.

Sectoral Analysis

Statistics Canada suggests that spending on machinery and equipment is anticipated to increase by 6.3% in 2024, while investments in nonresidential construction, including factories and warehouses, are expected to grow by a more moderate 3.6%.

Industry Specifics

Commodities companies are likely to reduce capital spending in 2024, with a projected growth rate of 4.8%, a significant drop from the double-digit increases seen in the previous years. On the other hand, manufacturing is expected to experience a substantial 31% rise in capital spending, driven by clean-energy projects supported by government initiatives.

In conclusion, the outlook for Canadian capital spending in 2024 points towards a moderation influenced by various factors, including high interest rates and differing sectoral dynamics.

Campari-Milano 2024 Outlook

Navigating Divorce as a Corporate Executive

Leave A Reply

Your email address will not be published. Required fields are marked *

Related posts

A New Bid Emerges for Sculptor Capital Management Inc.
News

A New Bid Emerges for Sculptor Capital Management Inc.

Boaz Weinstein's investor group, including Bill Ackman and Marc Lasry, offers over $12 per share to acquire Sculptor Cap...

United Natural Foods Inc.'s Fiscal Q1 Results: A Mixed Bag
News

United Natural Foods Inc.'s Fiscal Q1 Results: A Mixed Bag

United Natural Foods Inc. reported a narrower-than-expected adjusted loss but failed to meet revenue estimates in their...

Nikola Faces Setback with Battery Recall
News

Nikola Faces Setback with Battery Recall

Nikola faces setback as battery-electric trucks are recalled over fire risk, impacting stock performance. Future outlook...

Spectrum Brands to Release Fiscal Third-Quarter Results
News

Spectrum Brands to Release Fiscal Third-Quarter Results

Spectrum Brands is set to announce its fiscal third-quarter results, with projections for sales, adjusted earnings, and...