Poll shows more Canadian businesses will provide jobs this year

Several Canadian businesses plan to make more investments and provide more jobs over the next 12 months based on a latest poll from the Bank of Canada. Fifty-one percent of businesses that participated in the survey said they are expecting more employees over the said time period while 15 percent expect lower employment.

The number of companies that plan to hire more is currently at its highest level since late 2014. The data from the central bank's quarterly business outlook survey, which was released Monday, suggests that Canadian companies have become more positive about future sales and exports. Several companies expect increase in sales growth amid surging domestic and foreign demand.

The survey showed that companies across the country said they have seen better indicators of future sales than 12 months ago "by a solid margin.”It also indicates that firms in all sectors and regions are planning to add jobs.

Additionally, the report implies that excess capacity persists, but companies are looking forward to a gradual tightening as demand increases. Prices are still subdued, with firms anticipating little momentum in either input or output prices. "Meanwhile, some firms believe that activity in sectors experiencing robust growth (such as housing and automobiles) could soon level off," the report said.

CBC News notes that an increasing number of Canadian firms perceives US economic growth under the administration of US President Donald Trump. The Keystone XL pipeline and a possible US infrastructure spending were viewed as benefits according to the survey.

"Nevertheless, the report notes that companies are wary in an environment of elevated uncertainty related to potential changes into the US policy. The survey suggests that increased US protectionism, delays in pro-growth US policies and reduced competitiveness of Canadian firms if US corporate tax is cut are among the negative risks that firms believe they would need to face.

TD Economics senior economist Brian DePratto said the Bank of Canada is "undoubtedly pleased” with the survey’s result. He said expecting a solid economic momentum into the remainder of 2017 may be reasonable. As for the bank's position on interest rates, DePratto said the bank is "not likely to change the dovish tone of recent communications.”

"Until intentions begin translating into actual investment, Bank of Canada officials appear likely to downplay today's [business outlook survey] and the recent improvement in the Canadian economic data more broadly," he wrote. The Bank of Canada is slated to release its next interest rate decision on April 12.