Canadian business executives have reported “subdued” expansion plans amid the current economic climate. There is modest domestic demand and a continued fallout from an energy-price crash, a central bank survey found.
The Bank of Canada commented that less executives forecasted faster sales growth, there is “substanial slack in the labour market, and investment plans remained “cautious”.
The Ottawa-based central bank’s report said: “Modest domestic demand, uncertainty and insufficient foreign demand are the key factors holding back investment intentions. Overall business sentiment is subdued.”
The survey showed little development in the outlook for business investment, a major element in what Governor Stephen Poloz believes will be a recovery led by non-energy exports. The process has been frustrated by years of unstable global growth and maintained weakness in commodity prices.
“This is an early indication that maybe they aren’t as confident,” said David Tulk, head of global macro strategy at Toronto-Dominion Bank’s TD Securities unit, referring to how policy makers view the recovery. “There is this tug of war taking place in Canada’s economy and it doesn’t seem like the foreign demand side is winning this round at least.”
The survey of about 100 executives was taken from May 9 to June 8, before the UK’s European Union referendum that could pose another obstacle to global demand later this year.
Read the June 2016 issue of Business Review USA & Canada magazine