Firms still positive about future, but some see moderation ahead: central bank - InfoNews

Current Conditions

-0.6°C

Firms still positive about future, but some see moderation ahead: central bank

April 09, 2018 - 7:55 AM

OTTAWA - Firms remain upbeat about future sales, business investment and hiring — but some are predicting a moderation following last year's red-hot pace, the Bank of Canada's latest business outlook survey said Monday.

The central bank's quarterly poll of about 100 firms found overall business sentiment remained positive and above historical averages, even though the indicator dipped somewhat compared with January.

"Forward-looking sales indicators remain positive across most regions and sectors. Some firms expect a moderation in sales activity from high levels in the past year," the report said.

"Although less so than in recent surveys, intentions to increase investment continue to be widespread. Employment intentions are solidly positive, based on firms' plans for hiring to support expected sales growth or to expand operations."

The survey, conducted between Feb. 12 and March 9, was released about a week before the Bank of Canada's next decision on its trend-setting interest rate.

Central bank governor Stephen Poloz has raised the benchmark rate three times since last July, however, he's expected to proceed cautiously due to trade and competitiveness challenges as well as signs Canada's powerful economic performance of 2017 has cooled.

The survey found companies expected sales to grow at a faster pace over the next 12 months, but it noted several of the firms anticipated a moderation of activity following the strong performance of the past year. The responses often reflected expectations of a return to a more sustainable pace, the report said.

Firms polled also anticipated stronger sales overall from increasing U.S. demand. However, some also said they expected protectionism and reduced competitiveness could limit the benefits they see from the improving American economy.

The report said most firms still planned to boost investments in machinery and equipment over the next year, although the indicator edged down compared to its reading in the January survey. The responses showed plans for greater spending were most widespread in the services sectors.

The poll also found hiring intentions increased — and were widespread across regions and most sectors — amid continued concerns that labour shortages had intensified over the last year.

"Labour-related constraints continue to be the most-prevalent obstacle to scaling-up operations in response to an unanticipated increase in demand," the report said.

"On balance, firms anticipate capacity pressures to further intensify over the next 12 months, pushed by strong sales prospects and expected difficulties finding labour."

Follow @AndyBlatchford on Twitter

News from © The Canadian Press, 2018
The Canadian Press

  • Popular vernon News
  • Comments
  • Police search for missing Kelowna woman
    KELOWNA - Kelowna RCMP are asking for the public's help in finding a missing 27-year-old woman. RCMP say Joenna Saunders was last heard from on Nov. 27. She was reported missing on Dec.
  • Girl opens Christmas present she gave to boy when she dumped him in 1971
    ST. ALBERT, Alta. - A man in Edmonton who made international headlines for holding onto a wrapped Christmas gift from a high-school girlfriend who dumped him nearly 50 years ago finally learned wh
  • Water quality advisory in effect in North Okanagan
    NORTH OKANAGAN - The district has issued a water quality advisory for the North Okanagan. The Regional District of North Okanagan Silver Star Water Utility in conjunction with Interior Healt
  • Kamloops Fire Rescue respond to McDonalds deep fryer fire
    KAMLOOPS - A Kamloops McDonalds was temporarily closed last night due to a small deep fryer fire. Kamloops Fire Rescue arrived at the McDonalds location in Sahali at about 11:30 p.m. last ni
  • Vernon fast food restaurant held up by man with syringe
    VERNON - RCMP are on the hunt for a suspect after a robbery at a Vernon restaurant earlier this week. A man threatened staff with an allegedly contaminated needle on Wednesday, Dec. 5, at Wr
View Site in: Desktop | Mobile