“Results from the autumn Business Outlook Survey indicate that business sentiment improved slightly, but regional differences are more pronounced. Positive views in Central Canada contrast with widespread weakness in the Prairies.” (Bank of Canada Autumn 2019 Business Intentions Survey, October 22, 2019)

Every quarter the Bank of Canada published the results from its Canadian business outlook survey. The latest one was shown between August 20 and September 13.

The latest survey indicates that overall business sentiment in Canada has been improved for the first time this year, thanks to higher optimism in Ontario and Quebec. However, business sentiment in the two energy-intensive provinces, Alberta and Saskatchewan continues to be very weak.

Although business sentiment in Canada has clearly improved, there are two major concerns that have surfaced from the latest survey.

One concern is the profound negativity in Alberta and Saskatchewan.

A second worry is the fact that new business hiring intentions are quite weak. That is, Canadian companies plan to increase employment has dropped to the lowest level since the third quarter of 2016/ Many respondents reported that they aimed for increased efficiency via automation rather than emphasize new hiring.

A new survey by the Bank of Canada suggests that business sentiment has edged higher but there are more pronounced differences between the Prairies, hard hit by the turmoil in the energy sector, and Central Canada.

The Bank of Canada has kept its key interest rate target on hold at 1.75%, a rate that is much higher than many of its peers. The Bank has predicted that the weakness in the economy at the start the year was only temporary and that growth would pick up this year. Nonetheless, the weak job outlook emerging from this survey must be giving the central bank some cause for concern.

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