(Bloomberg) -- Canadian business leaders reported the strongest outlook since 2011 including record hiring plans, according to a central bank survey.
The overall Business Outlook Survey Indicator -- an aggregate gauge -- measured 2.81, up from 0.73 in the last report, according to the Bank of Canada’s quarterly Business Outlook Survey published Friday in Ottawa.
Results for nearly all survey questions were above historical averages and the positive outlook is also more widespread across different industries and regions of the country, it said.
“This result provides clear evidence of a generalized improvement in business sentiment” the bank’s report said of the rise in the summary indicator.
- The balance of companies looking to make new investments edged down but “remains elevated”
- The overall view of future sales growth was the highest since 2014
- The difference between those expecting faster sales growth and those expecting lower sales growth at 31 percentage points. The share of businesses expecting an increase in future sales growth was 50 percent, versus 19 percent who see a decline
- The balance of opinion on hiring intentions rose to 58 percentage points, the highest on record
- The share of companies expected to increase investment in machinery and equipment was 48 percent in the survey, while those projecting a decline was 19 percent. The 29 percentage point balance of opinion remained “elevated,” close to 35 percent in the last report that was the highest since 2010
The survey may give insight into why Governor Stephen Poloz switched this month to signal he’s prepared to raise interest rates. Swaps trading suggest investors are placing about a 70 percent chance of a rate hike at the central bank’s next decision July 12.
- There is “only modest growth in future input and output prices”
- Inflation expectations edged down, with 70 percent of firms predicting inflation of between 1 percent to 2 percent
- Pressures on firms’ capacity to produce are the highest since the second quarter of 2015
- Most affected companies are taking a wait-and-see approach around risks from the U.S. such as trade protectionism, the central bank report said. Other companies see opportunities such as for enhanced energy trade