BoC Survey Shows Improvement in Business Sentiment

Hiring plans among Canadian businesses surged to an all-time high, according to the most recent Bank of Canada (BoC) Business Outlook Survey.

The majority of businesses have plans for hiring in the coming 12 months, due to expectations for demand recovery and faster sales growth as lockdown measures are eased.

The report also showed that workers’ confidence in landing a job has almost restored its level prior to the coronavirus pandemic.

Other sectors, such as restaurants and hotels, believe recovery to pre-pandemic staffing levels will take more than 12 months.

“About 40 percent of firms have current sales below pre-pandemic levels. Generally, these firms see substantial increases in their indicators of future sales relative to extremely weak levels a year ago.”

As for inflation expectations among Firms, it saw a rise to a near-record high level.

A third of businesses anticipate inflation will be above 3% over the next two years, but more than half continue to expect it to remain within the BoC’s inflation target range 1-3%

Firms with inflation expectations above 2 percent cited several contributing factors, including: higher commodity prices, such as for energy and food, supply chain bottlenecks, expansionary fiscal and monetary policies, and the release of pent-up demand.