Bank of Canada poll finds businesses cautiously hopeful
By Louise Egan
OTTAWA (Reuters) - Canadian businesses were hopeful in the fourth quarter of 2013 that sales would increase over the next year and were more upbeat on investment and hiring than in the previous quarter, according to a Bank of Canada survey released on Monday.
But the positive outlook was not shared evenly among the senior managers participating in the bank's quarterly survey. Details of the responses showed that companies benefiting from an improving global economy appeared more encouraged than those relying solely on the domestic market.
"The winter business outlook survey provides some positive signs for the economic outlook, notably for exports and investment, although responses do not yet appear to suggest a significant strengthening," the central bank said in its report.
The bank cited "weak demand and domestic uncertainty" as weighing on some companies as they looked to the year ahead.
The Business Outlook Survey (BOS) of about 100 managers was taken between Nov 18 and Dec 12. It also showed most companies expect inflation to stay at the bottom end of the Bank of Canada's 1 to 3 percent target range and are experiencing less capacity pressure.
Bank of Canada Governor Stephen Poloz has said he is paying especially close attention to business sentiment and the poll results will feed into the bank's January 22 interest rate decision and monetary policy report. There has been some weak economic data since the survey was done and the Canadian dollar has softened considerably against the U.S. dollar.
The bank has held its key rate steady at 1.0 percent since 2010 and Poloz has described its current policy stance as "neutral". Markets are on the alert for any hint of the bank taking a dovish turn.
"On balance, there is little here to nudge the Bank of Canada one way or the other from its decidedly neutral stance," said Michael Gregory, deputy chief economist at BMO Capital Markets, in a note to clients. Continued...