Business outlook soft even before full shock of COVID-19: Bank of Canada

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OTTAWA — The Bank of Canada says workers were feeling upbeat about job prospects in the weeks before COVID-19 delivered a shock to the Canadian economy, while employers felt otherwise.

The quarterly survey of consumer expectations suggests more people anticipated searching for a new job and expected they would quickly find something new, while fewer thought they would lose their jobs.

Household spending expectations continued to edge up faster than expectations for wage growth, which the bank says suggests consumers by mid-February weren’t becoming more cautious in their spending.

Companies were providing the bank with a less than rosy picture of their expectations for the rest of the year, with results from the business outlook survey (conducted before the pandemic intensified) suggesting business sentiment had softened in most regions.

Much of the that sentiment emanated from the country’s oil-producing regions where companies were generally less optimistic, pulling back on capital spending and hiring plans as they watched the price of oil fall.

The report out this morning suggests things were getting worse in more sectors by mid-March, as restaurants, hotels and other service industries had seen a collapse in sales, and either closed or expected to soon because of declining cash flow.

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