BOC Business Outlook Survey: More Encouraging Signs Ahead?
The Canadian dollar strengthened this week, after a string of economic releases boosted sentiment toward the Canadian economy. Data on GDP, trade and employment beat forecasts, offering hope the economy was regaining momentum. Investors will look for more encouraging signs Monday when the Bank of Canada sets to release its Business Outlook Survey.
The quarterly survey captures the business outlook in Canada through the eyes of 100 executives, who share their analyses of the short-term economic situation. The previous release showed Canadian businesses were generally optimistic sales, investment and hiring would increase in 2014. However, weak demand and domestic uncertainty continued to weigh on the outlook.
According to the Winter 2013-14 Survey:
“The winter Business Outlook Survey provides some positive signs for the economic outlook, notably for exports and investment, although responses do not yet appear to suggest a significant strengthening. For many businesses, weak demand and domestic uncertainty continue to temper sales expectations and expansion plans.”
Bank of Canada Governor Stephen Poloz recently stated the central bank was putting more emphasis on anecdotal evidence, such as real conversations with Canadian businesses, to piece together an accurate outlook on the economy. The Business Outlook Survey provides just that — an approach that includes surveys and meetings with several top Canadian firms.
Monday’s reading will provide a more qualitative approach to understanding business activity, production capacity, inflation and credit conditions in corporate Canada. The details of the report will contain insights that could shape and influence the central bank’s immediate outlook.
A positive reading is expected to support the loonie, which on Friday topped 91 US cents for the first time since February. As of 14:40 GMT, the Canadian dollar was trading at 0.9108, up more than half a percent