Canadian Business Optimism Near-Record Levels Heading Into 2019

Despite trade wars, rising interest rates and volatile stock markets, Canadian companies say they are optimistic about the year ahead, according to a new poll conducted by the Bank of Canada.

Canadian businesses say they are especially optimistic about sales growth, foreign demand and their future investment plans.

The quarterly survey of Canadian business sentiment was conducted between mid-August and mid-September, before Canada agreed to an updated North American free trade deal with the U.S. and Mexico that has alleviated some of economic uncertainty.

Overall business sentiment in Canada was running at near-record levels, said the central bank's poll of senior managers from about 100 firms. And the positive results come a week before the Bank of Canada is widely expected to again raise interest rates. The central bank has raised interest rates four times since mid-2017, most recently in July.

On investment intentions, the survey found that, in order to keep up with rising demand, including an expected lift in foreign sales, companies expect to pump more money into their operations over the coming year.

However, the poll also found firms hiring intentions for the next 12 months came in lower than previous surveys. The dip followed a steady increase in hiring expectations over the last several surveys. Many companies reported that labour shortages had intensified over the past 12 months, with the biggest concerns coming from employers in Quebec.

The poll lists jobs in construction, transportation and information technology as being among the hardest to fill. Some companies linked the challenge to an aging population and changing occupational preferences as reasons it is difficult to find workers.