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Data released on Monday showed a significant decline in business confidence in Canada during March. Krishen Rangasamy, analysts at the National Bank of Canada warns the report was conducted between February 11th to March 6th, before the coronavirus crisis intensified. 

Key Quotes:

“Business confidence not surprisingly took a beating in the first quarter. The aggregate index of the Bank of Canada’s BusinessOutlook Survey sank to -0.68 in Q1, the lowest in year. Note that the survey was conducted between February 11th and March 6th, i.e. before coronavirus-related concerns had intensified.

“Capacity pressures decreased slightly, with just 46% of respondents stating either some or significant difficulty in meeting an unexpected increase in demand. Credit conditions eased slightly in general, although firms in the energy sector noted tighter non-price conditions.”

“Business sentiment was already on its way down before the coronavirus caused a sharp economic downturn. Watch for the next survey, i.e Q2 to show a historic drop in the BoC aggregate index to reflect the current Canadian recession.”