Highlights of the first quarter Bank of Canada business outlook survey
- Futures sales +6.0 vs -1.0 prior
- Survey points to a moderation from previous high levels of domestic and foreign demand in most regions; investment and employment intentions remain positive
- The share of businesses reporting capacity pressures has declined to a low level
- Firms anticipate input and output price growth to stabilize; inflation expected to decline but stay within inflation control range
- Fewer indications of labor shortages
- Expectations of US growth moderated amid political uncertainty and trade tensions with China
- some exporters reported that geopolitical tensions between Canada and China as well as other global trade issues are now hurting sales or are a source of uncertainty.
There was a significant slowdown in capacity pressures:
USD/CAD sank on the headlines. It's a generally poor survey and shows that the BOC won't pivot back to hikes and will have to think about cutting rates. What's a real surprise is how quickly some of these measures have dropped.
Separately, the senior loan officer survey showed that mortgage and non-mortgage lending conditions are largely unchanged.
