Canadian companies on balance were the least optimistic since 2012 as a plunge in oil prices weighs on energy producers, a central bank survey showed.
The share of companies forecasting a pick up in sales growth over the next 12 months fell to 40 percent in the first quarter, down from 43 percent at the end of last year. Those predicting declining growth rose to 36 percent, from 35 percent. The balance of opinion in a survey of 100 executives fell to 4 percentage points, the lowest since the third quarter of 2012, and down from 8 percentage points at the end of last year.
“Firms in the Prairies and in the energy supply chain continue to report being adversely affected by weaker oil prices,” the central bank said in its report. “Signs of spillovers to other sectors and regions are also emerging.”
Troubles in the oil industry were partly offset by the beneficial impact of lower oil prices and a weaker currency, the bank said. Economists surveyed by Bloomberg had forecast pessimists and optimists would be evenly split in the quarter.
The balance between companies expecting to increase investment versus those predicting a drop declined to 4 percentage points, from 8 percentage points the previous quarter, the Ottawa-based bank said today.