BoC's Business Outlook Survey: Sentiment is strongly negative in all regions and sectors due to impacts from COVID‑19 pandemic and drop in oil prices
06.07.2020, 15:05

BoC's Business Outlook Survey: Sentiment is strongly negative in all regions and sectors due to impacts from COVID‑19 pandemic and drop in oil prices

  • Overall Business Outlook Survey indicator fell sharply (to -7.0 in Q2 from 0.5 in Q1) due to the impacts of COVID‑19 pandemic and measures to contain the spread of the virus
  • Businesses expect weakness in domestic and foreign demand to continue due to impacts from COVID‑19 and low oil prices
  • Forward-looking sales indicators collapsed; now at a record-low level, future sales indicators are suggesting a notable decline in sales growth in the near term
  • Softer sales expectations are widespread across all regions and sectors, with firms often expressing high degree of uncertainty about consumer behaviour and future demand
  • Half of exporters expect their sales abroad to decrease over the next 12 months
  • However, many businesses expect weakness in their sales to be temporary and not extend over entire 12-month period ahead; half of firms anticipate that their sales will mostly recover within next year as pandemic-related impacts recede
  • Businesses in most regions and sectors intend to significantly cut their investment spending; hiring plans are muted
  • Expectations for input and output price growth as well as for overall inflation are all down considerably because of weak demand related to the pandemic
  • Firms’ inflation expectations declined significantly to a near-record low; many businesses anticipate inflation will be below 1 percent over the next two years
  • Credit conditions have tightened significantly, but government measures are helpful offset

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