Survey Insights

The global economy is normalizing, but the situation is still not normal. That’s because we’re adjusting to several major shocks, including the pandemic, Russia’s war, and higher interest rates as central banks battle inflation.

In this context, Statistics Canada’s latest Canadian Survey on Business Conditions (CSBC) shows that costs and labour issues remain the biggest near-term obstacles for Canadian companies. The continuing evidence of broad-based cost pressures on firms raises the risks that high inflation proves more persistent than the Bank of Canada would like. This survey also finds that the higher interest rates designed to bring down inflation are starting to bite: they’re causing firms to raise prices, reduce investment and delay hiring, and they’re the most common reason why businesses can’t take on more debt. Acute labour challenges are a key concern for most companies with more than five employees, and these issues are hindering production, especially in services.