The quarterly survey of businesses from the Bank of Canada

  • Highest since 2009
  • Prior was +39
  • Overall business outlook +1.3 vs -2.2 (highest since Q4 2018)
  • One-third of businesses don't see sales returning to pre-pandemic in 2021
  • Many goods-producing firms report supply constraints
  • Firms overall expect inflation to remain somewhat below 2% in the next two years
  • Consumer survey shows expectations for 1-year inflation increased
  • Investment intentions +26 vs +2
  • Hiring +43 vs +26 prior
  • Output prices +15 vs 0 prior (highest since 2016)
  • Nov 16 to Dec 4 interviews
  • Full survey

Main indicator positive for the first time since the pandemic and at the highest since 2018. Around half of firms said current sales were below pre-pandemic.

This is good news but I don't think it's anything surprise. The inflation story will be one to watch this year and here's the commentary:

Survey results point to increased positive pressures on input costs, largely related to rising freight costs. Because of improved demand conditions, more firms plan to pass these higher costs through to their output prices.

That's coupled with low inflation expectations but it can all change in a hurry.