Canada Business Outlook Research Brief

Business confidence held steady despite uncertainty. The Bank of Canada’s second-quarter Business Outlook Survey suggests that business confidence remained relatively resilient amid external headwinds, with overall activity softening only modestly. Higher oil prices improved sentiment in the energy sector, partly offsetting weaker conditions across non-energy industries. Meanwhile, the resulting inflationary pressures appear to have been short-lived. Although two-year inflation expectations rose to 3.2 per cent in the survey, the monthly Business Leaders’ Pulse survey indicates that short-term price pressures eased in June, with longer-term expectations remaining well anchored. Although events in the Middle East remain fluid, somewhat dating the outlook survey, the results provide a snapshot of business sentiment amid heightened geopolitical uncertainty.