Bank of Canada Q1 business outlook survey -0.6 vs +2.2 prior

Bank of Canada Q1 business outlook survey -0.6 vs +2.2 prior Author: Adam Button | Category: Central Banks

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Highlights of the first quarter Bank of Canada business outlook survey

  • Futures sales +6.0 vs -1.0 prior
  • Survey points to a moderation from previous high levels of domestic and foreign demand in most regions; investment and employment intentions remain positive
  • The share of businesses reporting capacity pressures has declined to a low level
  • Firms anticipate input and output price growth to stabilize; inflation expected to decline but stay within inflation control range
  • Fewer indications of labor shortages
  • Expectations of US growth moderated amid political uncertainty and trade tensions with China
  • some exporters reported that geopolitical tensions between Canada and China as well as other global trade issues are now hurting sales or are a source of uncertainty.

There was a significant slowdown in capacity pressures:BOC survey 2USD/CAD sank on the headlines. It's a generally poor survey and shows that the BOC won't pivot back to hikes and will have to think about cutting rates. What's a real surprise is how quickly some of these measures have dropped.
Separately, the senior loan officer survey showed that mortgage and non-mortgage lending conditions are largely unchanged.
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