OTTAWA—Canadian businesses are anticipating expenditures of $15.5 billion on industrial research and development (RD) in 2012, edging up 0.9% from 2011, according to Statistics Canada.

Still, RD spending remains below its 2007 peak of $16.8 billion.

The statistics agency says the recovery is being driven by growth in the manufacturing sector, up by $228 million (3.1%) to $7.6 billion. Within the manufacturing sector, communications equipment intends to invest $1.5 billion, up $129 million from 2011.

Overall, businesses in the services sector anticipate spending slightly less at $6.8 billion this year than in 2011 (down 0.2% or $12 million), with most of the decline occurring in scientific research and development services (down $22 million or 1.3%).

Respondents to a survey said 61% of total spending will be concentrated in the wages and salaries for RD personnel, a level last seen in 2009 (60%).

Businesses are also suggesting they will dedicate 5% of their total industrial RD expenditures to purchase land, buildings and equipment. The most recent peak in the importance of capital expenditures to total industrial RD spending occurred in 2001 at 11%. Since 2009, this ratio has been under 6%.

In 2010, industrial RD spending continued predominately in ontario ($6.8 billion) and Quebec ($4.7 billion). RD spending in Quebec edged up 0.5% from 2009, while spending in ontario declined by 4.2%. All other provinces except Manitoba (1.4%) saw decreases in industrial RD spending from 2009.