(Bloomberg) -- Canadian business sentiment continued to show signs of recovery, with executives more optimistic about investment than at any time since 2010, according to a Bank of Canada survey of corporate managers.
Measures of investment, employment and sales prospects improved, according to the Bank of Canada's quarterly Business Outlook Survey, which cited everything from a recovery of oil prices to the impacts of a weaker Canadian currency.
The readings are another signal Canada's economy has turned the page on the oil crash that began more than two years ago. GDP has expanded 1.5 percent since October, the biggest three-month gain since 2011.
“Taken together, the results suggest a modest recovery in business sentiment after a two-year period of weakness,” the report said.
Key Points
- The share of companies expected to increase investment in machinery and equipment was 46 percent in the survey, while those projecting a decline was 11 percent. The 35 percentage point balance of opinion was the highest since 2010.
- The balance of opinion on hiring intentions rose to 38 percentage points, the highest level since 2014.
- The share of businesses expecting an increase in sales growth was 52 percent, versus 31 percent who see a decline. While the 21 point balance of opinion was slightly below the 26 percent reading in the last quarter, it marked the first time since 2014 of back-to-back readings of above 20 percent.
- A measure of future sales growth, which looks at perceptions of orders, advanced bookings and sales inquiries, saw its balance of opinion rise to 46 percent, the highest since 2012.
- The Bank of Canada's overall Business Outlook Survey Indicator -- an aggregate gauge -- measured 0.77. While down from 1.13 the previous quarter, the back-to-back positive readings followed a long string of negative scores for this measure.
Other Highlights
- Pressures on capacity are still ‘modest.'
- Firms in energy producing areas see a recovery under way.
- Export prospects continue to support the outlook, in spite of elevated uncertainty about potential U.S. policy changes, in particular corporate tax cuts and protectionist measures.
(A previous version of this story was corrected in the third bullet point to reflect the balance of opinion on sales was for the rate of growth, rather than the overall level.)
--With assistance from Erik Hertzberg
To contact the reporter on this story: Theophilos Argitis in Ottawa at targitis@bloomberg.net.
To contact the editors responsible for this story: Theophilos Argitis at targitis@bloomberg.net, Chris Fournier, Stephen Wicary
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