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Business optimism falls to great recession levels says Bank of Canada

EURUSD News by Newsroom on 15:05 July 08, 2020 EST

Canadian business sentiment is still dropping, despite a partial re-opening of the economy. Bank of Canada (BoC) released its Business Outlook Survey for Q2 2020. Business sentiment has dropped to the lowest level since the Great Recession, a hint indicating a recession ahead.

The quarterly index gauges the optimism of business leaders. The most recent data was surveyed in mid-May to early June. The date is especially noteworthy, because the economy was partially reopened at that point.

Canadian business sentiment is falling very quickly, and hasn’t been this low in a while. The index read -7 in Q2 2020, the lowest it has been since Q1 2019, the first quarter of the Great Recession. More important is the rate of deterioration, which typically leads a recession. This is an indicator that business leaders think things will get worse in the economy, not better.