OTTAWA — Some Canadian firms are seeing a sharp decline in demand from an outbreak of the coronavirus outbreak, while others are still bracing for a potential economic hit, a special Bank of Canada survey showed on Monday.
The central bank said it called 52 firms and 11 industry organizations between March 13-17 as part of a special consultation to better understand the quickly evolving impacts of COVID-19.
“The impact of the shock on firms was still escalating, with some firms seeing very recent sharp declines in demand and others only expecting them,” the Bank said.
Businesses in food services, accommodation and recreation said their sales, orders and reservations had collapsed, while non-food retailers reported “a dramatic drop in foot traffic” and said they were scaling down their operations as a result.
Some manufacturers said they expected reduced demand and were anticipating temporarily shutting down their operations as well as reducing their workforce.
Meanwhile, results of the central bank’s quarterly business survey, also released on Monday, found business sentiment had softened in most regions even before concerns around the coronavirus outbreak intensified, with confidence slipping the most among firms in energy-producing areas. The traditional business survey of about 100 firms was conducted from February 11 to March 6.
The Bank of Canada says workers were feeling upbeat about job prospects in the weeks before COVID-19 delivered a shock to the Canadian economy, while employers felt otherwise.
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The quarterly survey of consumer expectations suggests more people anticipated searching for a new job and expected they would quickly find something new, while fewer thought they would lose their jobs.
Household spending expectations continued to edge up faster than expectations for wage growth, which the bank says suggests consumers by mid-February weren’t becoming more cautious in their spending.
Companies were providing the bank with a less than rosy picture of their expectations for the rest of the year, with results from the business outlook survey (conducted before the pandemic intensified) suggesting business sentiment had softened in most regions.
Much of that sentiment emanated from the country’s oil-producing regions where companies were generally less optimistic, pulling back on capital spending and hiring plans as they watched the price of oil fall.
With files from Reuters and Canadian Press