• REW
  • MMT App
  • COVID-19
  • Careers
  • Contact
  • French
  • Find an Expert
  • Home
  • Mortgage Prep
  • Buying a Home
  • Refinancing
  • Commercial
  • Rates & Lenders
  • More Value
  • Economic Insights
  • Our House Blog
  • REW
  • MMT App
  • COVID-19
  • Careers
  • Contact
  • French
  • Find an Expert
  • All
  • COVID-19
  • Finance
  • Housing Market

Published by Sherry Cooper

July 6, 2020

Bank of Canada Business Sentiment Lowest Since 2009.

Canadian Business Sentiment Is Negative 

The Bank of Canada released its Summer Business Outlook Survey (BOS)* this morning, covering an interview period from mid-May to early June. In all provinces and all sectors, the sentiment was hugely negative owing to the impact of the pandemic and falling oil prices. 

Since the previous survey, conducted before concerns about COVID-19 has intensified, but as oil prices had already started to fall, business confidence plunged. Surprisingly, however, the business sentiment was not as negative as during the 2007-09 global financial crisis (see Chart 1 below). This was mainly due to the government support offered to cushion the blow of the pandemic. Also, many firms expect a reasonably quick rebound in operations after a temporary decline in sales, unlike the 2007–09 crisis when businesses anticipated persistent weakness in demand.

Highlights of the BOS:

    • Forward-looking sales indicators have collapsed. Many businesses referred to elevated uncertainty. Still, roughly half of firms anticipate that their sales will recover to pre-pandemic levels within the next year.
    • Businesses in most regions and sectors intend to cut their investment spending significantly. Hiring plans are muted, although a quarter of firms plan to refill some positions after recent layoffs.
    • Reports of capacity pressures and labour shortages have fallen significantly. This suggests a substantial widening in economic slack.
  • Expectations for input and output price growth, as well as for overall inflation, are all down considerably.
  • Credit conditions have tightened significantly, but government measures are a helpful offset.
________________________________________________________________________________________
*The Business Outlook Survey summarizes interviews conducted by the Bank’s regional offices with the senior management of about 100 firms selected in accordance with the composition of the gross domestic product of Canada’s business sector. This survey was conducted by phone and video conference from May 12 to June 5, 2020.

BoC Consumer Expectations Survey–Q2 2020

This survey was conducted from May 11 to June 1, in the throws of the ongoing pandemic. Of most concern to consumers was the prospect of losing their jobs. Many believed finding another job would be difficult. As well, consumer expectations for wage growth declined significantly.

According to the survey, consumer expectations for interest rates have fallen sharply, although they expect rates to rise over the 1-year to 5-year horizon, albeit moderately. At the same time, expectations for average house price growth have dropped to zero for Canada as a whole. For Ontario, respondents expect the average home price to rise by 1% over the next year. In BC, people see home prices falling a moderate -0.30%, with Albertan respondents suggesting a price decline of -4.3% (see the chart below). It is important to note that oil prices have risen considerably since the completion of this survey. All of these forecasts are well below the figures in the Q1 study.

It is noteworthy that all of these expectations are well below the CMHC forecast for the national average home price to fall 9%-to-18% over the coming year.

Please Note: The source of this article is from SherryCooper.com/category/articles/

Share this:
Categories: Finance

Recommended articles.

View More

Interest Rates & Commodity Prices Surge On Economic Rebound Optimism

February 26, 2021

Canadian 5-Year Bond Yield Surges  In an unprecedented move, bond yields are spiking around the world. Yields globally are now at levels last seen before the coronavirus spread worldwide. At the […]

Read More

Market Interest Rates are Rising Almost Everywhere

February 23, 2021

Longer-Term Yields are Rising Despite Central Bank Inaction While central banks hold overnight rates at record lows, anchoring short-term interest rates and the prime rate, mid-to-long-term government yields have been […]

Read More

Canadian Home Sales Hit An All-Time Record High in January

February 16, 2021

Housing Continued to Surge in January Today the Canadian Real Estate Association (CREA) released statistics showing national home sales hit another all-time high in January 2021. Canadian home sales increased […]

Read More

Why all the talk around rising interest rates in Canada?

February 5, 2021

Dominion Lending Centre’s chief economist Dr. Sherry Cooper says some economists may want to take into consideration one of the glaring weaknesses in Canada’s battle against COVID-19 before getting too […]

Read More

Canadian Employment Falls to Lowest Level Since August

February 5, 2021

Extended Lockdowns Batter Jobs Market This morning, Statistics Canada released the January 2021 Labour Force Survey showing the negative economic impact of extended lockdowns in Ontario and Quebec. The closing […]

Read More
  • Find an Expert
  • Home
  • Mortgage Prep
  • Buying a Home
  • Refinancing
  • Commercial
  • Rates & Lenders
  • More Value
  • Economic Insights
  • Our House Blog
  • REW
  • MMT App
  • COVID-19
  • Careers
  • Contact
  • French
  • Find an Expert

© 2021 Dominion Lending Centres Inc. All rights reserved. Privacy Policy Terms & Conditions