The Bank of Canada released the results of its latest Senior Loan Officer Survey on Friday, revealing tightening credit conditions.

The central bank said that survey respondents reported widespread tightening in both the pricing and availability (non-pricing) dimensions of business-lending conditions. They attributed this tightening mainly to the ongoing turmoil in credit markets and to concerns about the general economic outlook.

A large portion of respondents reported tightening to all three types of business borrowers: small business, commercial, and corporate, it said, noting that there was a near-record shift in responses towards tighter pricing and non-pricing aspects of lending conditions. The non-pricing responses indicate that lenders have tightened the terms or standards for loans or are limiting the amount of funds allocated to some sectors, regions, or businesses, the bank said.

The bank also reported the latest business outlook survey, indicating that the combination of weak U.S. demand, volatile financial markets, and slowing momentum in the West are weighing more heavily on business activity in Canada.

“Firms reported a less robust sales performance over the past year than in recent surveys, and they are expecting little change in the pace of sales growth over the next 12 months,” it said. “Moreover, they noted a higher level of uncertainty about sales prospects. Intentions to increase investment remain solid, however.”

Pressures on production capacity are little changed from the summer survey, the Bank said, adding that declines in commodity prices have helped relieve expected price pressures. Inflation expectations have also eased slightly, but remain elevated, the bank noted.