Survey Insights on Business Conditions

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!