Each year the Bank of Canada surveys business leaders about conditions in the marketplace and their feelings about where things will go. This year’s report, which was released on Monday, said firms are reporting improved sales over the past year–the first time in two years. That’s reason to be optimistic indeed. (Here is the original report.)
According to this recap in CBC news, the good news continues: there’s the suggestion that execs and business owners are planning on increasing their payrolls during the next two months. This promise added jobs and even greater economic expansion.
In another survey quoted in the article, corporate loan officers across the country told the Bank of Canada that they are increasingly extending credit to firms on better terms–especially the big firms. This means that money is flowing more cheaply and ostensibly more freely. And money flowing is good news for the economy.
There remain concerns, however. Execs are concerned that the global recovery may not be very strong. In this survey, their optimism is down compared to the April survey–which makes sense given the stock market tumbles and weakening loonie of late. Concerns about the state of the US economy in particular are front of mind. Economic weakness south of the border appears to be the new normal for now.
The surveys conducted by the Bank of Canada are worth keeping an eye on; they make up a critical piece of the decision about whether or not to raise interest rates and by how much. This, of course, effects mortgage rates, home equity loan rates, etc. However, the Bank does warn about the statistical reliability of the reports, given that the sample size is small. Bank of Canada interviewed about 100 senior managers at companies across the country to generate the data.
