Surveys remain consistent with slow growth

The Bank of Canada’s Business Outlook Survey showed that firms’ expectations for future sales improved only slightly at the start of the year. The future sales balance is still consistent with annual GDP growth slowing to less than 1%. At the same time, the Markit manufacturing PMI dropped to a 30-month low of 50.5 in March, which is consistent with GDP growth of about 1.5%. Following the recent improvement in some of the global business surveys, the Canadian equivalents may soon follow suit, particularly with oil prices surging. But given problems in the housing market and the fragile financial position of consumers, we suspect that GDP growth will remain below potential for most of the year.