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Business sentiment in the spring Business Outlook Survey improved but remains subdued overall. The positive impetus coming from sustained foreign demand continues to be largely offset by the persistent drag and spillovers from the oil price shock.

The Bank of Canada today announced that it is raising its target for the overnight rate by one-quarter of one percentage point to 4 per cent.

G-20 representatives, academics, market participants, and members of international financial institutions were brought together in Ottawa to explore the connection between robust financial markets and economic growth and development, share experiences, and to develop policy recommendations, where possible. Participants identified several areas they deemed critical for fostering strong domestic financial markets and reducing external vulnerability: sound macroeconomics policies, strengthened financial infrastructures and banking systems, and exchange rate flexibility for countries with widely open capital accounts. Papers presented in the six sessions and keynote address highlighted a number of issues, including currency mismatches, the sequence of financial liberalization and supervisory reforms, the development of local financial markets, infrastructure building and governance, and appropriate incentives.

On balance, firms expect sales growth to pick up over the next 12 months, and plan to increase investment spending and employment. Their investment plans are increasingly being targeted at expansion and at improving efficiency to promote future growth.

The results of the summer survey indicate that businesses foresee an improvement in the economic outlook. In particular, the balances of opinion on both future sales and employment have turned positive. Nevertheless, firms expect their activity to recover only gradually, and they continue to be cautious regarding investment.

Overall, businesses continue to be positive about the outlook for the next 12 months. While survey responses generally still indicate modest growth, with many firms citing headwinds from strong competition and moderate demand, the strength in commodity prices has led to increased optimism among those firms tied to commodity-related activity.

The Bank of Canada today announced that it is lowering its target for the overnight rate by one-quarter of one percentage point to 2 3/4 per cent.

Artificial intelligence is changing how much we produce and what work humans do. But we don’t yet know all the ways AI will affect the economy.

Firms anticipate stronger demand as pandemic conditions improve, according to results from the Business Outlook Survey in the third quarter of 2021. However, many businesses face supply constraints that will limit their sales and put upward pressure on their costs. Together, these demand pressures and supply challenges are driving widespread plans to invest, hire staff and increase prices.

Last Thursday, we released our April Monetary Policy Report. In the report, we said that the global economy has been unfolding largely as expected, and the outlook for the Canadian economy is essentially unchanged from that in January's Monetary Policy Report Update.