Canada Economics Weekly: Stronger April activity is just one month

Research evidence excerpt

Canada Economics Weekly: Stronger April activity is just one month

Canada Economics Weekly

02 July 2026 Citi Research

Next Week’s Highlights

Key events in Canadian markets next week

Monday, July 6, 10:30am

BoC Business Outlook Survey (Q2)

The Business Outlook Survey will be the most important survey input in BoC

decision making and may be helpful in assessing the shifting balance of risks

between growth and inflation that presented a dilemma for monetary policy in

June. But we are a bit cautious that the explicit responses in the BOS could seem a

bit stale this quarter.

Last year, the second quarter Business Outlook Survey was released a few weeks

later in July (July 21) and conducted throughout the month of May. This suggests

responses this year may reflect a period from mid-April to mid-May, well before the

substantial decline in oil prices. We expect the BOC will have conducted follow-up

surveys (the Business Leaders Pulse surveys) reflecting a period after oil prices

began to fall. But while this could mean anecdotes in the survey are a timelier

reflection of business sentiment, it is not clear if survey data itself will be very

timely.

Thus, we would not be surprised to see some increase in inflation expectations

with higher oil prices, but depending on more recent survey responses, this may

not be a concerning sign for officials. Comments on investment intentions will also

be important to watch as businesses grow more accustomed to a still-uncertain

environment. Investment intentions were stronger in the Q1 survey, rising to a

balance of 29% more firms expecting stronger investment. Surprisingly softer

investment intentions could help support a more dovish argument of lower rates to

further help support economic growth, even in an economy that is undergoing