BoC Q4 business survey outlook shows overall sentiment is subdued and firms expect growth in costs to continue to ease

• Firms expect sales growth to improve in coming year, thanks largely to rate cuts and anticipation of further cuts.


• Separate BoC December online poll of business leaders shows widespread uncertainty about new US administration's policies, with 40% anticipating negative effects.


• Hiring intentions remain soft; a larger-than-normal share of firms plan to keep employment levels roughly flat over the coming year.


• Q4 business survey indicator -1.18, up from -2.29 in Q3 (revised from -2.31).


• Balance of opinion on indicators of future sales rises to +30 from +11 in Q3 (unchanged).


• 20% of firms expect inflation to be above 3% for next 2 years, up from 15% in Q3.


• 33% of firms reported outright decline in sales over previous 12 months, up from 30% in Q3.


• 15% of firms expect Canada to be in a recession over the next year, down from 16% in Q3.


• Separate BoC Q4 survey of consumer expectations shows 46.5% of Canadians expect a recession, down from 49% in Q3.


• BoC survey consumer survey expectations for 5-year inflation have dropped to 2.99% from 3.03% in Q3.

Analysis details (15:37)

Note, BoC survey was carried out from November 7-27th, before the 50bps cut on Dec. 11th and Trump made tariff threat on Nov. 25th.

20 Jan 2025 - 15:33- Fixed IncomeImportant- Source: Newswires