Firms still positive about future, but some see moderation ahead: central bank

OTTAWA — A new Bank of Canada survey suggests companies remain upbeat about future sales activity, business investment and hiring — but some are predicting a moderation following last year’s red-hot pace.

The central bank’s quarterly poll of about 100 firms found overall business sentiment remained positive and above historical averages, even though the indicator dipped somewhat compared with January.

The bank’s spring business outlook survey says companies maintained optimistic sales growth expectations across most regions and sectors over the next 12 months.

The survey says companies anticipate stronger sales overall from increasing U.S. demand, however, some also fear that protectionism and reduced competitiveness could limit the benefits they see from the improving American economy.

The report says most firms still planned to boost investments in machinery and equipment over the next year, although the indicator edged down compared with its reading in the winter survey.

The poll also found hiring intentions increased and were widespread across regions and most sectors amid continued concerns that labour shortages have intensified over the last year.

The survey was conducted between Feb. 12 and March 9 and it arrives about a week before the Bank of Canada’s next decision on its trend-setting interest rate.

Central bank governor Stephen Poloz has raised the benchmark rate three times since last July, however, he’s expected to proceed cautiously due to trade and competitiveness challenges as well as signs Canada’s powerful economic performance of 2017 has cooling down.