Canada: BoC’s Business Outlook Survey do not warrant additional stimulus – NBF


Today the Bank of Canada released its Business Outlook Survey. According to National Bank of Canada’s analyst Krishen Rangasamy the document showed a deterioration in sentiment but it does not warrant addition stimulus from the central bank. 

Key Quotes:

“The Spring edition of the Bank of Canada’s Business Outlook Survey (conducted between February 19th and March 13th) showed a deterioration in sentiment, the survey’s main index sinking into negative territory fo3 the first time since 2016. The observed moderation in sales and diminished optimism about the U.S. economy caused firms to scale back expectations about sales over the next 12 months. Capacity pressures and indicators of labour shortages eased dramatically in Q1. As such, intentions to increase employment and investment dropped a bit compaed to the winter survey.”

“While the survey results are disappointing, that’s not to say all is bleak in Canada. The decline in business sentiment clearly reflects the soft patch of 2018Q4-2019Q1, a temporary phenomenon in our view, especially considering the rebound in oil production and prices since then.”

“The survey results do not warrant additional stimulus from the Bank of Canada at next week’s meeting.”

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