Bank of Canada survey: Q2 business sentiment improves, economic recovery seen broadening

OTTAWA, July 5 (Reuters) - Business sentiment in Canada continues to improve with hard-hit firms becoming more confident that sales will pick up as vaccines roll out, suggesting a broadening of the economic recovery ahead, a Bank of Canada survey showed on Monday.

The central bank’s Business Outlook Survey Indicator reached its highest level on record in the summer survey, in part due to base-year effects, but also as positive sentiment became more widespread.

“All but a few firms feel the uncertainty related to the pandemic is behind them,” the central bank said.

Most businesses reported an improvement in their sales prospects from a year-ago, and no firms reported signs of deterioration in demand. Still, about 40% of firms have current sales below pre-pandemic levels.

The outlook for foreign sales, particularly to the United States, is robust. Most businesses across all regions and sectors plan to hire, suggesting the labor market recovery will pick up, the survey said.

The survey of 100 firms took place between May 11 to May 28, when COVID-19 cases were falling, though third wave restrictions remained in place in many provinces.