The Bank of Canada said that lending conditions, business sentiment and a number of other economic indicators fell significantly in Q4, indicating a poor business climate and weakening economy.

The survey, titled as the Business Outlook Survey states that business sentiment and general business outlook has ” deteriorated
markedly since the autumn survey, as the effects of the international financial crisis and the weak global economy intensified and spread to domestic demand,” going on to analyze the summary of all business indicators measured within the survey as being at “the lowest point since the survey began in 1997.”

All the indicators measured by the survey are related to the realm of business belief in investment, employment, inflation and deflation and general production; these factors are not quantifiable outside the realm of opinion sampling. The process involves the surveying the C.E.O.’s and other business professionals with a number of questions about how they feel about their demand for employees and the outlook for their business in the coming year as compared to the current year.

The Senior Loan Officer Survey was also released today - a survey which analyzes loan officers’ ability and perception of provision of credit and loans to businesses in Canada. This report was equally dismal, with respondents reporting widespread tightening in lending conditions marking the second consecutive quarter of “highest ever” negative conditions in this report (this survey began collecting data in 1999).

“Rising expectations of a severe recession in the United States are negatively affecting the sales prospects of many firms, in addition, more firms indicated significant downside risks to their sales outlook, owing to the high level of uncertainty stemming from current global economic and financial conditions,” said the Bank.

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