Canadian companies have become increasingly concerned about pressures on input costs and inflation, according to the Bank of Canada’s summer business outlook survey.

The balance of opinion regarding future sales growth edged up, but remains near zero, suggesting a pace of sales growth similar to that over the past 12 months.

The balance of opinion on investment rose sharply, and hiring intentions remain solid.

Nonetheless, regional differences remain pronounced. Firms in the manufacturing sector, or located in Central and Eastern Canada, were less likely to expect to increase employment than other firms.

Intentions to increase investment remain strongest in Western Canada, where firms are looking to alleviate capacity pressures.

Capacity pressures are little changed from their level in the spring survey, yet the balances of opinion on input and output prices rose to new highs and inflation expectations increased sharply, owing largely to the persistent strength in the prices of energy and other commodities.