BoC: Business Outlook Survey points to slight improvement in business sentiment

The Bank of Canada’s Business Outlook Survey for the third quarter highlighted that there was a slight improvement in the business sentiment but noted regional differences were more pronounced.

The USD/CAD retreated slightly from its session highs with the initial reaction to the publication and was last seen trading near 1.3100, adding 0.15% on a daily basis. Below are some additional key takeaways, as reported by Reuters.

“Indicators of future sales are positive in most regions, especially Quebec, but soft in the prairies; foreign demand slightly positive but weighed down by trade tensions.”

“Firms’ expectations of US  economic growth have weakened, some expect a small US  recession over the next 12 months and anticipate sales to be directly or indirectly negatively affected.”

“Plans to invest and hire more in next 12 months are healthy outside of energy-producing regions; firms in central Canada and British Columbia intend to expand workforces.”

“Capacity pressures somewhat elevated in firms concentrated in central Canada and British Columbia due to tightening labor constraints; firms anticipate capacity pressures will increase over the next 12 months.”

“Input price growth expected to soften modestly due to less pressure from commodity-related inputs.”

“Output prices expected to grow at a slightly greater rate than over past 12 months to pass along higher labor and non-commodity input costs.”

“Firms reporting marginal easing in credit conditions over past three months.”

“Regional sentiment suggests widespread confidence in quebec and ontario, modest levels in British Columbia and Atlantic Canada, and negative sentiment in the prairies due to ongoing challenges in the energy sector.”

“Inflation expectations are unchanged; majority of firms still anticipate inflation will be in lower half of bank’s target range.”

“Mortgage lending conditions eased in Q3 while non-mortgage lending conditions tightened; concerns about economic outlook and energy sector in prairies resulted in tightened price and non-price lending conditions.”