January 20, 2025 at 03:30PM
Future Sales Expectations at +31% vs +13%: Improved outlook with stronger demand expected, boosted by interest rate cuts (highest since Q2 2021)
More widespread plans to increase investment, well above historical average
Recession expectations at 15% vs 16%
Further easing in capacity constraints, labor shortages less intense
Labor shortages among lowest in survey history (ie, there is no labor shortage)
70% of firms planning normal-sized wage increases
Slightly higher but still between 2.5-3% range
Some key points:
Impact of US election becoming a key concern (40% expect negative effects)
Four interest rate cuts occurred between June and survey period
Firms increasingly focused on strategic pricing and affordability
Oil & gas sector showing robust outlook due to TMX pipeline and LNG Canada
This is better than I was expecting given all the tariffs fears. It was conducted after the US election from Nov 7-27, though that doesn’t capture the height of Trump’s threats against Canada.
Full report
Some charts:
This should give the Bank of Canada some confidence that the rate-cutting cycle is beginning to work.
This article was written by Adam Button at www.forexlive.com.
