Surveying Canadians
Now on to another important tool: surveys.
Like other central banks, the Bank conducts a number of surveys with the financial sector. The results provide us with information on important issues like lending conditions as well as the demand for and supply of credit. We also gain important insights on risks and resiliency in the financial system. And we talk to financial market professionals to hear their views on where the economy and inflation are headed.
But today, in talking about surveys, I want to focus more on how our regional offices inform our monetary policy deliberations by reaching out to households and businesses.
Since the late 1990s, the Bank has been expanding its reach into the diverse regions that make up this great country. This work has included opening regional offices, and surveying businesses and consumers about their economic views. Our regional staff are well positioned to strengthen our ties with key local stakeholders such as industry, government, educational institutions and community organizations.
Currently, the Bank’s regional offices conduct three key macroeconomic surveys: the Business Outlook Survey, the Business Leaders’ Pulse and the Canadian Survey of Consumer Expectations., ,
I’ll go over each one in greater detail in a moment. But overall, surveys like these accomplish three main goals.
First, they help inform our outlooks for the economy and inflation. We hear from individuals and businesses about how they’re feeling—a measure of their current levels of confidence. We also ask what they expect to happen to prices and their own spending in the future.
This gives the Bank forward-looking views on economic activity, demand, capacity pressures and inflation. That makes surveys particularly helpful in providing early indications of how the economy is reacting during times of great uncertainty, like the current trade conflict.
Surveys also shine a light on trends that may be simmering beneath the surface. They help us understand behavioural changes that don’t always show up in aggregated data reports—at least not immediately.
Finally, these surveys help us gather a wide range of views on how current economic conditions are playing out in communities across Canada.
Our national economy is made up of diverse regional economies. Economic conditions may differ across regions, and regions may respond differently to broad-based upswings and downturns. Survey data give us a clearer view of the differences in how households and businesses are experiencing the economy.
Let me now turn to each of the surveys.
The Business Outlook Survey—or BOS for short—is a quarterly survey of businesses across the country. It has existed since 1997, which provides us a rich, long dataset for comparisons.
Staff in our regional offices meet with local business leaders to discuss their views on the economy. We ask about their expectations for sales and demand, as well as their investment intentions. We probe their views about labour shortages, as well as hiring and wages. And we ask for their outlooks on costs and pricing, as well as economy-wide inflation. This gives us a broad range of perspectives about how businesses view the economy.
For example, the results of the BOS for the fourth quarter of 2021 helped us better understand how the COVID-19 pandemic was affecting firms. For the first time since the start of the pandemic, we saw that businesses were planning to pass along cost increases stemming from supply chain pressures. They had concluded that customers understood these pressures and were willing to accept price increases.
More recently, firms told us that uncertainty about tariffs has been affecting them in multiple ways. These impacts include weaker demand from their business customers that would be directly affected by tariffs.
Now on to the Business Leaders’ Pulse, or BLP for short. This is our newest survey, created in 2021. It’s a short monthly online questionnaire to assess firms’ expectations for growth in sales and employment. It also asks about perceived risks to their business outlook, and poses other topical questions.
The BLP provides a flexible and nimble pulse of evolving situations. It complements the BOS with timely feedback from firms about the effects of rapid changes in the economy.
And the BLP has been very helpful in monitoring effects from the situation south of the border. For example, businesses were reporting an increase in both uncertainty and inflation expectations as early as November 2024. In December, we also began noting a decline in business sentiment—even before the new US administration was sworn in.
