FILE PHOTO: A sign is pictured outside the Bank of Canada building in Ottawa, Ontario, Canada, May 23, 2017. REUTERS/Chris Wattie/File Photo
OTTAWA (Reuters) – Business sentiment in Canada is “strongly negative” even as COVID-19 restrictions have eased, though roughly half of firms surveyed expect their sales to recover to pre-pandemic levels within 12 months, a Bank of Canada survey showed on Monday.
The widespread negative sentiment caused by the coronavirus shutdown and the drop in oil prices led the Bank of Canada’s business outlook indicator to plunge near the low experienced during the 2007-09 global financial crisis, the Bank said.
“Softer sales expectations are widespread across all regions and sectors, with firms often expressing a high degree of uncertainty about consumer behavior and future demand,” the central bank said.
Weakness was most prevalent among firms in tourism, finance and real estate industries, along with those linked to energy. However, many businesses surveyed also expect the weakness in their sales to be temporary, the Bank said.
The Bank of Canada said it spoke with about 100 firms between May 12 to June 5, as part of its first regular survey since concerns around the coronavirus pandemic intensified.
The Bank of Canada slashed its key overnight interest rate three times in March to 0.25%, which it has said is its effective lower bound. It’s next interest rate release is set for mid-July.
(This refile fixes typo in headline)
Reporting by Kelsey Johnson and Julie Gordon; Reuters Ottawa Bureau, Kelsey.Johnson@tr.com;1-613-235-6745