firms less worried by worst-case tariff scenarios

By Promit Mukherje and David Ljunggren

Outoa, July 21 (Reuters) – Bank of Canada said in a regular quarterly survey study on Monday that Canadian companies are witnessing a lesser opportunity for a worse tariff scenario, but they remain cautious and continue to employ and invest under the check.

The bank’s commercial expectations study said that the expectations of short -term companies have returned to the levels that were observed at the end of last year and the number of companies that plan to stagnate decreased slightly.

Earlier this year, companies were concerned that American definitions would severely strike the economy, which led to inflation, weak economic growth and unemployed men.

However, its effect was largely contained on the steel, aluminum and cars sectors. Inflation, job numbers and economics did not deteriorate significantly.

“The tariff and the relevant uncertainty … still have significant effects on companies’ expectations. However, the worst scenarios depicted by the companies depicted in the last quarter are now less likely to happen,” the poll said.

The bank said that about a third of companies expect higher costs related to the tariff, which decreased by two -thirds of two -thirds in the last quarter.

A separate monthly survey of business leaders indicates that expectations between companies, especially exporters, have improved, as a few customs tariffs have been affected so far.

However, there is still a large -scale certainty about how American measures and their effects on the economy are still established.

The Outlook Business index – a measure of what the business prospects appear in the current economic conditions – decreased to its lowest level per year to 2.42 negatives.

The semester survey said that about 35 % of companies reported the indicators of requests for requests, prior reservations and sales inquiries had deteriorated compared to 12 months before 29 % who said the indicators had improved.

The survey said that the intentions of the investment remain silent, adding that the balance of opinion is much lower than its average in the long run.

Analysts and economists say that the Outlook survey gives the central bank more teeth to receive the call rates.

Canada Bank has maintained its main rate at 2.75 % since April. Only about 12 % of the current financial market bets show a possible reduction on July 30 when the bank announces the monetary policy decision.

A separate survey of the central bank in consumer expectations showed that 64.5 % of Canadians expect stagnation over the next 12 months, a decrease from 66.5 % in the first quarter.

“The commercial conflict leads consumers to become increasingly cautious about their spending plans and change spending behavior,” the report said. Many respondents wanted to spend money on Canadian goods and local vacations.