Business Outlook Survey—Winter 2020–21

More exporters than in the autumn survey were positive about their sales outlook, but most are recovering from low levels of activity. They expect foreign demand—particularly from the United States—to be supportive. The majority of these firms are manufacturers (e.g., automobile, residential and commercial construction products), while some are commodities exporters (e.g., energy) and a few are in the services sector (e.g., transportation and logistics, technology and software).

Investment and hiring plans

The balance of opinion on investment in machinery and equipment moved up and now sits well above zero, with firms across all regions pointing to positive spending plans (Chart 4). This improvement reflects optimism among firms that were not negatively affected by the pandemic as well as recovering businesses’ expectations of a return to normal conditions. Citing emerging strength in sales, many firms reported plans to expand operations and boost productivity by investing in automation and digitalization. They also plan to improve the customer-facing component of their online business. While the overall outlook for investment has improved, the impact of the pandemic on spending plans remains uneven (Box 1). Several firms in high-contact services, including tourism and live entertainment, plan to hold back investment and spend less than they did over the past 12 months.

News – Bank of Canada