Canadian Businesses Optimistic of Hiring Prospects, Reports Bank of Canada Survey

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Canadian Businesses Optimistic of Hiring Prospects, Reports Bank of Canada SurveyCanadian firms expressed optimism that hiring will pick up despite the uncertainty surrounding domestic demand, according to a Bank of Canada poll.

The divergence between the percentage of executives who revealed that they would scale up their hiring in the next 1 year and those who intend to lay off was 46 points, the widest such disparity since the second quarter of 2012. The balance of outlook on future revenue growth was 27 percentage points, down from 29 points, according to the Bank of Canada’s Business Outlook Survey.

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The data indicates “encouraging signs for the economic outlook, although responses indicate that headwinds from intense competition and domestic uncertainty persist,” said the bank in its quarterly report.

The Governor of the Ottawa-based bank Stephen Poloz recently disclosed that the decision to shift the 1 percent benchmark interest rate will depend on whether his forecast that investment and exports will grow as U.S. economy recovers and the Canadian dollar weakens.

So far, recent data has shown that job growth has expanded faster than promised, while the economy has grown. Inflation has also remained under the central bank’s 2 percent goal, reported Bloomberg.

Businesses retained their investment plans, as the balance of opinion rose from 19 points to 21 points. However, this is lower than 36 points recorded in the third quarter of 2010.

“Many businesses continue to report that uncertainty – most often related to domestic demand or, in some cases, sector-specific or regulatory factors – is leading them to delay or shift the focus of their investment plans.”

So far the Canadian dollar has weakened 6 percent against the U.S. dollar over the past six months; while inflation is expected to hover around 1 percent to 3 percent which is well within the central bank’s target.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com