The Bank of Canada says workers were feeling upbeat about job prospects, while employers felt otherwise in the weeks before COVID-19 delivered a shock to the Canadian economy.The Bank of Canada’s latest poll of Canadian businesses shows the COVID-19 crisis has inflicted severe damage on the oil and gas sector and many consumer-oriented businesses – but that conditions were deteriorating even before the pandemic hit.
However, grocery retailers and related transport businesses reported that “sales had reached unprecedented levels,” the bank said. Oil and gas companies reported they have cut their 2020 capital spending budgets by 30 per cent, on average, compared with 2019. “In addition, significant staffing reductions were imminent, especially among oilfield service companies,” the report said.
The bank’s business outlook survey indicator, a composite gauge of the survey’s findings, dipped into negative territory – a signal that"business sentiment had softened even before the concerns around COVID-19 intensified in Canada,” it said. Hiring intentions dipped to their lowest level since mid-2016, while intentions for investment in machinery and equipment remained near 3½-year lows.
“It’s a very big question about whether consumer confidence and business confidence can be maintained,” Mr. Poloz said in a March 27 news conference, adding that the government’s massive aid package and the Bank of Canada’s deep interest-rate cuts over the past month “are aimed at doing that.”
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