Firms still positive about future, but some see moderation ahead: central bank

The survey, conducted between Feb. 12 and March 9, was released about a week before the Bank of Canada’s next decision on its trend-setting interest rate.

Central bank governor Stephen Poloz has raised the benchmark rate three times since last July, however, he’s expected to proceed cautiously due to trade and competitiveness challenges as well as signs Canada’s powerful economic performance of 2017 has cooled.

The survey found companies expected sales to grow at a faster pace over the next 12 months, but it noted several of the firms anticipated a moderation of activity following the strong performance of the past year. The responses often reflected expectations of a return to a more sustainable pace, the report said.

Firms polled also anticipated stronger sales overall from increasing U.S. demand. However, some also said they expected protectionism and reduced competitiveness could limit the benefits they see from the improving American economy.

The report said most firms still planned to boost investments in machinery and equipment over the next year, although the indicator edged down compared to its reading in the January survey. The responses showed plans for greater spending were most widespread in the services sectors.

The poll also found hiring intentions increased — and were widespread across regions and most sectors — amid continued concerns that labour shortages had intensified over the last year.

“Labour-related constraints continue to be the most-prevalent obstacle to scaling-up operations in response to an unanticipated increase in demand,” the report said.

“On balance, firms anticipate capacity pressures to further intensify over the next 12 months, pushed by strong sales prospects and expected difficulties finding labour.”

Follow @AndyBlatchford on Twitter

Andy Blatchford, The Canadian Press

by Canadian Press

Firms still positive about future, but some see moderation ahead: central bank

What's Trending