On balance, firms reported that sales growth has been stable over the past 12 months (Chart 1). The balance of opinion of close to zero continues to mask a divergence between the Prairies, where sales growth slowed, and the rest of the country, particularly Ontario and British Columbia, which experienced stronger growth.

Although firms have, on balance, not seen an increase in past sales growth for nearly two years, they remain optimistic that sales will grow at a somewhat faster pace over the next 12 months (Chart 2, blue bars). This expectation is supported by improving indicators of future sales, such as new orders (Chart 2, red line), particularly in the service sector. The balance of opinion reached its highest level in five years and indicates that, by a solid margin, businesses across the country saw better indicators of future sales than 12 months ago.

The sales outlook is increasingly supported by domestic sales perspectives along with the expected rebound in energy-related activity. Respondents also referred to the favourable effects of the weaker Canadian dollar for exports and the tourism sector. Meanwhile, some firms believe that activity in sectors experiencing robust growth (such as housing and auto-mobiles) could soon level off.