Business survey from the Bank of Canada
- Overall survey -2.2 vs -6.9 prior
- Business sentiment had improved as many virus containment measures were lifted, but remained weak in all regions of the country
- Firms expect sales to increase but there are indications the pace of recovery will slow and be uneven
- One-third of businesses anticipate sales will not return to pre-pandemic levels within 12 months
- Investment intentions remain weak
- Inflation expectations have moved up but majority of firms still anticipate inflation will be lower half of the BOC range
- Hiring plans +26 vs +22 prior
- Labor shortage +25 vs +13 prior
- Full report
More evidence of a k-shaped recovery:
Regarding the return to pre-crisis sales levels, businesses' expectations fall into three groups, which suggests that the economic recovery will be uneven. One-third of firms reported that their sales were mostly unaffected or positively affected by COVID‑19. A second third of firms indicated that their sales have already fully recovered or will recover within the next 12 months. Most businesses in these two groups are linked to household consumption, residential real estate, natural resources or infrastructure spending. Another third of firms either expect their sales will not return for at least 12 months or are unsure when sales will fully rebound-these firms are lagging in the recovery. These businesses are generally linked to tourism and related industries, where physical distancing is difficult.
