-Brian DePratto, TD Bank
Strong US economic growth is likely to boost Canadian business activity in the upcoming months, according to the Bank of Canada's Business Outlook Survey released on Monday. The indicator of current sales growth remained nearly unchanged, while the indicator of expected sales growth climbed from 13% to 26% in the last quarter, the strongest rate since the end of 2014. In the meantime, companies pointed to a fading pressure of low oil prices and improving export prospects amid an optimistic outlook on the US economy. Currently, Canada sends about three-quarters of its exports to the neighbouring country. Moreover, investment intentions advanced to the highest level in two years, whereas the indicator of employment intentions climbed from 30% to 38% in the preceding survey. The number of employers reporting labour shortages reached the highest level since 2013. However, the figure remained well below its pre-financial crisis levels.
Furthermore, the majority of respondents see the inflation rate would fluctuate between 1% and 3%, below the Bank of Canada's target of 2%. Some companies suggested that inflation would remain weak aimd low commodity prices and sluggish economic growth.
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