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Despite the recent slowdown in real economic growth in Canada, the results of the summer survey do not suggest widespread weakness across Canadian firms. Firms have, however, become increasingly concerned about pressures on input costs and inflation.

In the spring survey, a number of indicators eased from their level in the winter survey. While the weaker U.S. economic situation is weighing more heavily on the outlook, firms are not expecting a marked change in the pace of business activity.

Overall, firms remain positive about the outlook, with the results of the winter survey showing little change from those of the autumn survey. Nonetheless, firms reported more uncertainty in light of recent developments, most notably the volatility in the value of the Canadian dollar.

Overall, businesses continue to be positive about the economic outlook, notwithstanding lower expectations for U.S. economic growth and recent financial market turbulence.

Expectations regarding future sales growth are essentially unchanged from the last survey. Investment and employment intentions have declined from the very high levels reported in the previous survey, but continue to be solid.

All indicators of business activity (future sales, expected employment, and investment intentions) have increased relative to the previous survey.

On balance, businesses expect their sales over the next 12 months to increase at a rate slightly above that posted during the preceding 12 months. Hiring and investment intentions have not changed significantly since the last survey.

Overall, businesses continue to be positive about the economic outlook.

The results of this Business Outlook Survey are broadly in line with those of the previous one.

Businesses are positive about the economic outlook. Hiring and investment intentions are strong, while future sales are expected to increase at about the same pace as in the past 12 months.

Supplemental questions on the appreciation of the Canadian dollar - Spring 2006