In its quarterly business outlook survey, the central bank surveyed 100 representative companies across various industries.
It found that "while forward-looking indicators of business activity remain low, they edged up modestly, supported by a generally positive outlook for the U.S. economy. However, sales expectations deteriorated sharply in energy-producing regions, where the oil price shock continues to weigh importantly on business sentiment."
Across all industries, the outlook for sales is optimistic, with 40 per cent of those surveyed expecting sales to grow at a faster rate over the next 12 months. Many firms attributed that projection to the U.S. economy and the lower Canadian dollar.
In terms of hiring, the survey found businesses overall have weak intentions — still below post-recession levels. But when the energy sector is stripped out, there are plans to boost investment in sectors like manufacturing which benefit from a low loonie and slumping oil prices.
The Bank of Canada's summer survey was conducted between mid-May and mid-June.
Capital spending cuts
A separate reading of sentiment is far less rosy, and shows businesses across the board are slashing spending plans.
Based on a survey of 25,000 public and private companies by Statistics Canada, capital expenditures in non-residential construction and machinery and equipment are expected to total $251.8 billion in 2015, down 4.9 per cent from 2014.
Unsurprisingly, the deepest cuts are in the mining, quarrying, and oil and gas extraction sector, which expects to spend 18.7 per cent less this year than in 2015.
However, it's important to note the timing of that survey. The sectors were interviewed between October 2014 and January 2015, when the oil price shock led to an "atrocious" first quarter, as described by Bank of Canada governor Stephen Poloz. The economy shrank 0.6 per cent in the first three months of the year, the largest contraction since 2009.
Coming rate announcement
Those fresh surveys give the Bank of Canada more data to chew on ahead of its next rate announcement on July 15, when it will decide to either hold, cut, or hike its key overnight lending rate.
The central bank shocked almost everyone in January when it cut its trendsetting interest rate to 0.75 per cent in January after keeping it at one per cent since September 2010.
BMO senior economist Benjamin Reitzes sees Monday's survey results as upbeat and "lower the odds of a move."
Others might disagree. With four straight months of negative economic output and the Bank of America predicting a recession in Canada, many economists have been forecasting a further rate cut.
Financial markets were pricing in a 96 per cent chance of a 25-basis-point rate cut over the next 12 months, according to a Monday morning currency outlook from Scotiabank Foreign Exchange.