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

Bottlenecks canada
  • Prior was 47
  • Business Outlook survey (BOS) shows continued improvement in business sentiment with overall indicator at record 4.73 vs 4.17 prior (revised to 3.96)
  • 1 year ahead inflation expectations hit record 3.72% but spike seen as temporary
  • Most firms anticipate healthy growth in domestic and foreign demand, particularly US demand
  • Many businesses face supply constraints that will limit sales and put upward pressure on costs
  • Labour shortages are frequent and have intensified from last year
  • Demand pressures and supply challenges are driving widespread plans to invest, hire staff and increase prices
  • Greater share of firms -- particularly large firms -- plan to invest more in machinery and equipment
Canadian investment

The next BOC rate decision is October 27. There was briefly a question of whether or not they would continue to the taper but with all the inflation concerns now, it's in little doubt. The market is expecting the BOC to begin a rate hiking cycle in the middle of 2022.

After reading through this report, I wouldn't be surprised if the Bank of Canada turned more hawkish in two weeks.