Canadian firms more optimistic about the future, says BoC survey
The results are fueling predictions Bank of Canada governor Stephen Poloz will raise the trend-setting interest rate for a third time since last summer
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OTTAWA—A new survey suggests Canadian companies are more upbeat about the future than they were three months ago with more firms planning to boost investment and to hire more workers.
The Bank of Canada poll found that overall business sentiment in the country has almost bounced all the way back to its summertime high.
The results come a little more than a week before the Bank of Canada’s next interest rate announcement—and will likely fuel predictions governor Stephen Poloz will raise the trend-setting interest rate for a third time since last summer.
The bank’s latest business outlook survey says hiring intentions have increased since the fall, particularly in the service sectors, as labour shortages have become more common.
The new poll of about 100 firms found that companies’ remain upbeat about their sales growth expectations over the next 12 months, although their outlooks have moderated somewhat as the strong run of recent sales activity returns to a more normal level.
The report says the indicator reflecting companies’ plans to increase investment spending has rebounded close to a post-recession high and has become broad based across sectors and regions.
The survey shows the share of businesses predicting they will face some or significant difficulty meeting any unexpected rush of demand has also climbed to its highest level since the 2008-09 recession.
Last Friday, an impressive jobs report led many analysts to change their predictions to say that Poloz will raise its key interest rate target at its next scheduled announcement on Jan. 17.