Business Outlook 2016 Survey -BoC

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Business Outlook 2016 Survey -BoC

Banque du Canada

Business Outlook Survey Results of the Summer 2016 Survey | Vol. 13.2 | 4 July 2016

The summer Business Outlook Survey indicates that overall business sentiment is subdued. The boost from foreign demand remains insufficient to outweigh the continued drag from commodity-related activity combined with modest domestic demand.

Overview ƒ

  • Forward-looking indicators of sales suggest soft business activity ahead, featuring prominent divergences: prospects remain dim among firms hit most directly by the oil price shock, but are more solid outside the affected regions and sectors. Firms in service sectors are generally more optimistic. ƒ
  • Firms continue to take advantage of business opportunities in foreign markets, supported by US growth, while expectations for sales growth within Canada are more subdued following weak past sales. ƒ
  • Investment plans remain cautious, with many firms tied to the energy sector budgeting for further cuts. Plans to increase capital expenditures are more widespread among service-oriented firms. Hiring intentions remain modest overall. ƒ
  • Capacity pressures edged down in light of weak demand.  Firms still see substantial slack in labour markets. ƒ
  • Growth in both input and output prices is expected to stabilize, reflecting competitive pressures and diminishing exchange rate pass-through.  Medium-term inflation expectations remain concentrated in the Bank’s inflation-control range. ƒ
  • After a net tightening in the spring survey, credit conditions moved toward an easing.


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