- Future Sales Expectations at +31% vs +13%: Improved outlook with stronger demand expected, boosted by interest rate cuts (highest since Q2 2021)
- More widespread plans to increase investment, well above historical average
- Recession expectations at 15% vs 16%
- Further easing in capacity constraints, labor shortages less intense
- Labor shortages among lowest in survey history (ie, there is no labor shortage)
- 70% of firms planning normal-sized wage increases
- Slightly higher but still between 2.5-3% range
Some key points:
- Impact of US election becoming a key concern (40% expect negative effects)
- Four interest rate cuts occurred between June and survey period
- Firms increasingly focused on strategic pricing and affordability
- Oil & gas sector showing robust outlook due to TMX pipeline and LNG Canada
This is better than I was expecting given all the tariffs fears. It was conducted after the US election from Nov 7-27, though that doesn’t capture the height of Trump’s threats against Canada.
Some charts:
This should give the Bank of Canada some confidence that the rate-cutting cycle is beginning to work.
This article was written by Adam Button at www.forexlive.com.
