Business outlook turns slightly positive: poll

Business sentiment in Canada has turned slightly positive for the first time since the COVID-19 pandemic began, with the outlook bolstered by stronger foreign and domestic demand, according to a Bank of Canada survey.

The survey, conducted ahead of many tougher restrictions aimed at curbing the surging COVID-19 infections, found that while half of businesses say their current sales are below pre-pandemic levels, most expect them to rise in the next 12 months.

“The Business Outlook Survey indicator continued to recover and turned slightly positive, signalling improved business sentiment,” the Bank of Canada said in a report on Monday. “Robust foreign demand, improved confidence related to vaccines, and ongoing government relief programs all contribute to the improved outlook.”

Canadian bankers also were upbeat. Bank CEOS forecast a rosier growth outlook for 2021 and 2022 on Monday, counting on the rollout of coronavirus vaccines to help drive an economic recovery and release billions of dollars worth of pent-up consumer demand.

The approval of vaccines to prevent the spread of COVID-19 prompted the banks' chief executives to strike a more optimistic tone at the RBC Capital Markets Canadian bank CEO conference.

The Bank of Canada survey of around 100 firms was conducted between Nov. 16 and Dec. 4, prior to a number of Canadian provinces imposing stricter COVID restrictions and before the vaccine rollout began. While business sentiment strengthened overall, it remained solidly negative for many firms.

Indeed, one-third of businesses do not expect sales to return to pre-pandemic levels in the next 12 months. Still, the investment and employment outlook improved from earlier surveys, with about half of firms now expecting to increase their workforce in 2021.