Highlights of the Bank of Canada's quarterly business outlook survey
- Prior was +23.0
- Overall outlook +0.4 vs +0.2 prior (revised to -0.1)
- Futures sales positive in most regions, led by Quebec
- Foreign demand slightly positive but weighed down by trade tensions
- Plans to hire and invest more in next12 months are healthy outside of energy-producing regions
- Firms anticipate capacity pressures will increase over next 12 months
- Input price pressures expected to soften modestly due to falling commodity prices
- Inflation expectations unchanged, majority still anticipate inflation will be in lower half of bank's target range
- Investment intentions +28 vs +20 prior
- Employment +31 vs +36
- Some or significant capacity restraints +50 vs +42 prior
- Labour shortages +34 vs +28 prior
- Full report
- From the senior loan officer survey: Firms reporting marginal easing in credit conditions
The survey pointed to a slight improvement in business sentiment overall but there are some worries, including this:
Firms' expectations of US economic growth have, however, weakened somewhat; several businesses refer to adverse impacts from US-China trade tensions. Some respondents now expect a small US recession over the next 12 months
Looking through the survey, it's very difficult to build a compelling case for a Bank of Canada cut. The market is pricing in a 14% chance of a cut before year end and nearly 50% by this time next year. Obviously, if the weakness comes, it will come from abroad.
