Bank of Canada business outlook survey: Future sales +23.0 vs +23.0 prior

Author: Adam Button | Category: Central Banks

Highlights of the Bank of Canada's quarterly business outlook survey

BOC business outlook future sales
  • 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.
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