The mood of business owners and leaders is improving as we enter the re-open phase of the COVID lockdown.
The quarterly report or assessment of business sentiment conducted by the Bank of Canada shows a majority of executives are anticipating higher demand for their products and services as the year progresses. That will likely lead to price increases as we move forward and it is good news for workers.
While there is still excess capacity in the system today – untapped potential idled because of COVID – that will disappear as we experience strengthening demand. The number of businesses forecasting increased sales compared to those expecting declines is 66 to 19…a wide gap that is heavily weighted towards an improving market.
That optimism is being translated into investment plans that should generate higher productivity as well. That spread is 52 to 16 in favor of devoting fresh capital to improving machinery and equipment in the next year.
And the spread is even wider in favor of hiring intentions in the coming year – standing at 68% planning to add employees compared to only three percent looking at reductions in their workforces.