Mining industry plans increase in capital spending

Canadian businesses, including mining, expect increased profits and capital spending in 1988 over 1987 levels, according to a survey undertaken by the federal Ministry of Regional Industrial Expansion.

Companies responding to the survey expect an average increase of 13.9% in capital spending in current dollars this year compared with 1987. The mining industry (in the non-manufacturing sector) is well down the list with an anticipated 4.5% rise, while primary metals companies (in the manufacturing sector; for example, iron and steel) expect their capital spending to decrease 23.2% compared with 1987.

Mining firms last year increased capital spending by 3.4% from 1986, while primary metals companies boosted capital spending by 5.8% compared with 1986.

A spokesman with the ministry said there is no consistent pattern from year to year as to spending by a particular industry; rather, factors such as changing market opportunities and competition would come to bear on any decision on spending limits.

The non-manufacturing sector is expecting a higher increase in capital spending than the manufacturing sector. Business investment spending is expected to rise in all regions of Canada, with the highest rate of growth expected to occur in the Prairies, followed by Quebec, Atlantic Canada, British Columbia and Ontario. About 64% of the 315 companies participating in the survey predict higher profit levels this year compared with 1987; about 13% expect a lower profit performance.

The planned level of spending in 1988 on new plant and equipment by all the companies surveyed exceeds $29 billion.