Soft business prospects even before the total shock of COVID-19: BoC

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OTTAWA – The Bank of Canada says workers felt optimistic about the job outlook in the weeks leading up to the COVID-19 shock to the Canadian economy, while employers felt the opposite.

The quarterly consumer expectations survey suggests that more people planned to look for a new job and expected to find something new soon, while fewer thought they would lose their job.

Household spending expectations have continued to climb faster than expectations for wage growth, which the bank says suggests that consumers in mid-February did not become more cautious about spending.

Businesses provided the bank with an optimistic picture of their expectations for the remainder of the year, with the results of the business outlook survey (conducted before the intensification of the pandemic) suggesting that the business climate is was softened in most regions.

Much of this sentiment came from the oil-producing regions of the country where companies were generally less optimistic, shrinking on capital spending and hiring plans as they watched the price of oil fall.

Report released this morning suggests that things were getting worse in more sectors in mid-March as restaurants, hotels and other service industries saw their sales plummet and either closed or expected soon due to lower cash flow.



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