Things are looking up

Economists from several major Canadian banks raised their 2012 Canadian economic growth forecasts this week. “Some of the worst-case scenarios [on Europe, the U.S. and China] look a little less worrisome now than they did, say, in December,” said RBC chief economist Craig Wright. “The uncertainty is easing.” Wright now expects the Canadian economy to grow by 2.6 per cent this year; back in December he was predicting an increase of 2.5 per cent. High commodity prices, strong corporate balance sheets, and renewed demand from the United States for Canadian exports are among the factors that will drive growth in Canada, the forecaster says. As the economic picture brightens, business confidence is increasing. According to a recent Statistics Canada survey, Canadian businesses plan to increase their investments in construction and machinery and equipment by 6.2 per cent this year to a record $394.1 billion.