Bank of Canada survey finds majority of companies expect higher sales in 2017

A new Bank of Canada poll suggests a greater number of Canadian firms expect to benefit from what they anticipate will be stronger post-election growth in the United States.
An improving U.S. economy is expected to mean good things for Canada's prospects, too, the central bank's survey found. (Patrick Kelley/Bloomberg)

More Canadian companies expect to benefit from what they anticipate will be stronger economic growth in the United States this year, the Bank of Canada said in a quarterly survey on Monday.

"When businesses were asked about the outlook for their firms and lenders were asked about their lending stance following the U.S. election, the answers came back indicating substantial enthusiasm toward prospects in 2017," Scotiabank economist Derek Holt said of the report, in which the central bank asked business owners their views on their company's prospects between November and December.

The survey found when it came to exports, many companies remained concerned about uncertainty linked to the possibility of new protectionist measures in the U.S.

The poll says that given this uncertainty, few firms have factored in the potential impacts from the outcome of the U.S. election into their sales outlooks.

Still, the bank says businesses were optimistic about Trump policies such as boosted infrastructure and military spending, as well as a regime with less onerous regulations on the energy sector.

Overall, companies expected faster sales growth over the next 12 months — with considerable support anticipated from areas such as services sectors, housing-related activities and tourism.

The survey also found stronger investment intentions among firms for the coming year, especially in Central and Eastern Canada, as well as more-widespread hiring expectations in most sectors and regions.

And most companies plan on hiring more in the next year, too.

The balance of opinion on hiring, according to the bank's survey, is that more companies plan to hire more employees than get rid of some. (Bank of Canada)

"Firms are much more optimistic about the future," TD Bank economist Brian DePratto said of the report. "The balance of opinion on future sales improved again, and now exceeds the historic average."

"The healing process continues," he added. "Today's report is consistent with an economy that has put the worst impacts of the oil shock behind it."

With files from The Canadian Press