Different survey, same results: business sentiment still suffering
The Bank of Canada's Business Outlook Survey indicator recovered somewhat but remains well below its historical average, signalling weak business sentiment
By ATB Economics 21 October 2020 1 min read
“Mutually reinforcing evidence” and the “reproducibility of results” are cornerstones of the scientific method. Simply put, the more experiments or studies that yield the same or similar results, the more confident we can be that the findings are accurate.
When it comes to the impact of the pandemic on business sentiment, multiple surveys are confirming that—despite some improvement since the spring lockdown—Canada’s business sector is still reeling from the hits it has taken and remains anxious about the future.
Conducted from late August to mid-September, the latest results from the Bank of Canada’s Business Outlook Survey are a case in point.
According to the Bank, “the Business Outlook Survey indicator recovered somewhat but remains well below its historical average, signalling weak business sentiment.”
“There are indications the pace of the recovery will slow and be uneven across industries. Although the majority of firms expect the rebound in their sales to continue, one-third of businesses anticipate their sales will not return to pre-crisis levels within the next 12 months.”
“Firms reported that their sales prospects are limited by weak demand and precautionary health guidelines, and that their investment and hiring plans remain modest due to elevated uncertainty.”
“Future sales indicators such as order books and sales inquiries are lower than 12 months ago, suggesting that growth in the near term will be weak.”
While not a surprise, these results highlight the ongoing challenges facing not just the business sector but the economy as a whole as we move deeper into the winter season with the virus still very much in play.
*Other surveys with similar results have been conducted by the Canadian Federation for Independent Business and the Business Council of Alberta.