The sharp fall in hiring intentions in the Bank of Canada’s Business Outlook Survey suggests that the 104,000 surge in employment in December is not a sign of things to come. The survey points to a slowdown in average monthly employment growth to just 10,000 or so. While the weakness of hiring intentions seems somewhat counter-intuitive given still widespread reports of labour shortages, the issue seems to be that firms have lost confidence in the economic outlook. The share of businesses expecting their sales to fall over the next 12 months is now at recessionary levels. We would not rule out a further weakening in hiring intentions in the next quarterly survey, although our view that firms will be more cautious about laying off staff than in the past implies that hours worked will be the more important indicator to watch for weakening labour demand.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services