Canadian businesses concerned about inflation

Canadian businesses concerned about inflation

Statistics Canada’s latest survey on business conditions carried out in July and August revealed a decline in business optimism from the previous quarter’s survey. Inflation worries persist among more than half of businesses surveyed. Nearly 20% of businesses faced challenges sourcing inputs and keeping up inventory.

• Rising inflation was mentioned by 57% of businesses as a likely significant obstacle in the next three months. This sentiment was most pronounced in the accommodation and food services and the health care segments.
• One-third of businesses anticipated a decrease in profitability, and slightly over one-quarter anticipated the need to increase the prices they charge.
• Despite inflation dipping to 2.8% in June and aligning closer with the Bank of Canada’s target range of 1%–3%, it lifted to 3.3% in July. Approximately one-quarter of businesses planned to raise prices over the next three months, a slight decrease from the previous survey’s figure of 28.3%.
• Optimism among businesses dropped compared to the previous quarter’s survey, as 66.3% of businesses expressed being either very optimistic or somewhat optimistic about the upcoming 12 months, a decline from the preceding quarter’s figure of 73.5%.

In the business world, looking ahead and anticipating challenges can make a significant difference to a company’s balance sheet and costs. As the new school year approaches, anticipating expenses with a carefully considered budget can make all the difference in efficiently allocating your own resources. This can be especially useful when budgeting for something special.

CIBC Market Brief