Survey Insights on Business Conditions
In-depth analysis of the Canadian Survey on Business Conditions, with responses from over 15,000 companies each quarter, including their key obstacles, expectations for the future and views on emerging issues.
In-depth analysis of the Canadian Survey on Business Conditions, with responses from over 15,000 companies each quarter, including their key obstacles, expectations for the future and views on emerging issues.
Stephen Tapp
Chief Economist, Canadian Chamber of Commerce
The outlook for Canadian businesses weakened noticeably in the third quarter, according to Statistics Canada’s latest Canadian Survey on Business Conditions (CSBC). Businesses expect sales and hiring to slow in the near term. With cost challenges remaining pervasive, profits are expected to shrink. The outlook is most concerning in Ontario (particularly for Toronto) and British Columbia, whereas Quebec continues to have the most optimistic outlook in the country.
Canada’s GDP unexpectedly contracted in the second quarter, and the CSBC provides new evidence of ongoing turmoil in the third quarter as the transportation sector was hard hit by the nearly two-week-long port strike at the start of July, adding to disruptions from forest fires.
Despite broad-based inflation pressures, with the economy sputtering, the Bank of Canada decided to hold its policy rate in September, rather than continue to tighten as it did over the summer. Nonetheless, after an almost 5% cumulative increase in the central bank rate, consumer spending has now stalled, as first illustrated by our Local Spending Tracker. This latest survey shows that businesses are also feeling the pain from higher rates, which are exacerbating cost pressures and debt constraints — especially for micro firms, whose finances are most restricted.
Continuing cost pressures explain why firms’ pricing behaviour still hasn’t normalized yet, even though headline inflation has slowed. Thankfully, the labour market is loosening up, although there are still significant challenges in sectors such as health care, accommodation and food services, manufacturing and construction. Supply chains are also recovering from their peak difficulties of last year, but they too remain problematic for affected companies.
This quarter’s survey includes new insights into interprovincial trade and related barriers, the various payment methods businesses accept and their environmental practices. Check out our Survey Insights Generator to explore the CSBC data and generate customized results by geography and firm characteristics. We’ll be back next quarter with the latest on Canadian business conditions!
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