Sales prospects abroad remain positive, supported by sustained foreign demand, but global trade headwinds and geopolitical tensions are weighing on exporters’ sales outlook (Box 1). Firms’ expectations for US economic growth, although still positive, have moderated from elevated levels in recent surveys.
Despite some softening in business sentiment, intentions to spend on machinery and equipment remain healthy in most regions and continue to point to an increase in investment over the next 12 months (Chart 3). Plans for higher expenditures are particularly widespread among businesses in the services sector supported by solid, mostly domestic, demand. As in recent surveys, many capital projects are aimed at expanding production capacity or increasing efficiencies. Firms exposed to the energy sector, particularly in the Prairies, cited weaker investment intentions due to uncertainty around pipeline approvals and recently mandated production curtailments.