A new survey conducted by the Bank of Canada has found that Canadian companies are more upbeat about the future than they were three months ago, with more firms saying they plan to boost investment and hire workers this year.
The Bank of Canada poll found that overall business sentiment in the country is now at levels last seen in summer 2017. And economists say this positive sentiment is another reason Canada’s central bank is likely to raise interest rates at its next policy setting meeting scheduled for January 17. It would be the third time since last summer that the Bank of Canada has raised its benchmark lending rate.
The new poll of about 100 firms found that Canadian companies remain upbeat about their sales growth expectations over the coming 12 months, although their outlooks have moderated somewhat as the strong run of recent sales activity returns to a more normal level. The survey also shows that the indicator reflecting companies’ plans to increase investment spending have rebounded close to a post-recession high and become broad based across many economic sectors and regions of the country – all of which bodes well for an economy that seems to now be firing on all cylinders.
The survey shows the share of businesses predicting they will face 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 the Bank of Canada will raise its key interest rate target at its next scheduled announcement on January 17.
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