The Bank of Canada’s (BoC) Business Outlook Survey (BoS) for the third quarter revealed on Monday that the business sentiment continued to improve with the BoS indicator hitting a record high of 4.73, compared to 3.96 in the second quarter.
Key takeaways as summarized by Reuters
“Most firms continue to anticipate healthy growth in both domestic and foreign demand, especially from the US.”
“Many businesses face supply constraints that will limit their sales and put upward pressure on their costs.”
“Demand pressures and supply challenges are driving widespread plans to invest, hire staff and increase prices.”
“Labor shortages are frequent and have intensified from last year; employment intentions remain at record-high levels.”
“Supply chain disruptions are more prevalent and have worsened since Q2; many businesses anticipate they will persist until H2-2022.”
Growing number of respondents plan to increase wages to attract and retain labor; firms intend to continue passing increased input costs on to their customers.”
“Compared to Q1 and Q2, greater share of firms plan to invest more in machinery and equipment; this is especially true among large companies.”
“45% of firms expect total CPI to be above 3% over next two years; half of those firms say drivers of higher inflation are temporary.”
“Expectations for 1-year ahead inflation increase to a record high 3.72%; spike seen as temporary.”
“Most respondents plan to increase their spending significantly but remain cautious because of the delta variant.”
The USD/CAD pair edged slightly higher from the session lows after this publication and was last seen trading flat on the day near 1.2370.