OTTAWA — A greater number of Canadian firms are expecting to benefit from what they foresee as stronger post-election growth in the United States, a new Bank of Canada poll suggested Monday.
However, the central bank’s latest business outlook survey also found when it came to exports many Canadian companies remained concerned about uncertainty linked to the possibility of new protectionist measures in the U.S.
The bank described the views of firms following the Nov. 8 presidential election as “divided.”
The results of the poll, conducted between Nov. 14 and Dec. 5, showed that given this uncertainty few firms have factored in the potential impacts from the outcome of the U.S. election into their sales outlooks.
Still, the bank said companies had positive expectations about some potential moves by president-elect Donald Trump’s incoming administration, which takes office Jan. 20.
“Some are optimistic about the prospect of increased infrastructure and military spending as well as changes to energy policies,” said the report, which was created after bank officials interviewed senior managers from about 100 companies.
“Others are more pessimistic, often because of the risk of increased protectionism.”
Overall, the bank said companies were generally more upbeat about their future sales prospects over the next 12 months, compared to the previous polls. They expected considerable support from areas such as services sectors, housing-related activities and tourism, the report said.
The data suggested that firms also think they’ll see an additional boost amid signs the negative impacts of the oil-price collapse have faded.
“The results partly reflect an expected recovery of activity in regions at the epicentre of the oil price shock, where businesses now anticipate at least some sales growth following a period of decline,” the report said in explaining the optimism.
Resources companies, the survey found, said they need to invest in their operations after two years of spending cuts.
Overall, the poll detected stronger investment intentions among firms for the coming year, especially in Central and Eastern Canada.
It also said there were more-widespread hiring expectations in most regions and industries, although many commodity-related firms still reported weak employment intentions.
Brian DePratto, a senior economist with TD Economics, said the poll suggests the outlooks for investment and future sales have recovered to levels last seen in 2014 — the year oil prices started their plunge.
“The healing process continues,” DePratto wrote Monday in a research note to clients.
“If there is a fly in the ointment, it is the reported heightening of uncertainty in light of the U.S. election outcome. Regardless, today’s report is consistent with an economy that has put the worst impacts of the oil shock behind it.”
Even with the rosier business outlook, experts still expect Bank of Canada governor Stephen Poloz to leave the benchmark interest rate at 0.5 per cent when he makes a scheduled announcement next week.
On Monday, the bank also released results of its survey of senior loan officers. It found that overall business-lending conditions were largely unchanged during the final three months of 2016 compared to previous polls.