OTTAWA — The Bank of Canada’s latest sampling of business sentiment shows company confidence in the economy is turning decidedly positive, and that may be good news for Canadian workers.
The influential quarterly survey of 100 representative firms shows that hiring intentions in March were the most positive in almost two years, with executives also pointing to higher sales over the past year and better prospects for future sales.
“Responses to the spring survey suggest than an improving U.S. economy and the recent depreciation of the Canadian dollar, together with firms’ efforts to create new opportunities, are helping to support expectations for better growth prospects ahead,” the bank said in a summary of the survey results.
The relatively sunny report appeared to boost markets as the dollar flipped from negative to positive following the 10:30 a.m. release. It was up 0.10 cents to 91.17 cents US at middday.
The findings are generally in line with improving confidence about the Canadian economy in general. Many economists now forecast a spring rebound in growth following the weather-related dip in the winter, with expansion continuing at a modest pace throughout the year.
“The increasing optimism of Canadian businesses is a good sign of where the Canadian economy will be heading over the next year,” said TD Bank economist Connor McDonald.
“A strong economic outlook for the U.S. and a weaker loonie will continue to support future sales and help drive modest Canadian growth.”
It was not all positive. Firms took note of the “strong competition” they face, which should temper sales growth, and that the higher prices that they expect for inputs won’t be fully passed along to customers.
The survey, which takes the temperature of business sentiment across a number of fronts, was conducted between March 10 and 17 and is sometimes cited by the central bank in its economic forecasts and interest rate setting decisions.
In a recent statement, Bank of Canada governor Stephen Poloz said he would pay more attention to anecdotal evidence and such surveys to inform the central bank’s outlook.