'Businesses are expecting a soft landing, with employment growing modestly over the next three months'
There’s been a slight dip among Canadian employers when it comes to business sentiment for the next three months, according to a report from the Canadian Chamber of Commerce.
Employers scored 98.4 on the group’s Business Expectations Index for the third quarter of 2024, down from 101.8 in the previous quarter.
“With the central bank watching firm pricing behaviour closely, this return-to-normal trend could bring more aggressive interest rate cuts from the Bank of Canada to support the weak economy,” says Stephen Tapp, chief economist at the Canadian Chamber of Commerce.
“Businesses are increasingly worried about an economic wildcard due to further supply chain problems ─ coming from labour disruptions to transportation networks potentially in rail, ports and airlines. The CSBC survey shows that a rising share of exporters expect supply chain obstacles to worsen in the near term.”
Source: Canadian Chamber of Commerce
The Canadian economy grew by 2.0 per cent in the second quarter of 2024 following 1.7 per cent growth in Q1, according to a previous report released by the Canadian Federation of Independent Business (CFIB).
The top 10 business obstacles employers expect over the next three months are:
Source: Canadian Chamber of Commerce
Business sentiment at highest in 3 years
While short-term business sentiment in Canada dipped in the third quarter, businesses’ longer-term optimism rose to its highest level in almost three years, based on the Canadian Chamber of Commerce’s survey of 15,000 companies.
Over three-quarters (76.7%) of employers are optimistic for the outlook of their business over the next 12 months.
This optimism has been growing since a drop from 73.5% in the second quarter of 2023 to 66.3% recorded in the following quarter.
Source: Canadian Chamber of Commerce
“In fact, this is now the best showing for the ‘year-ahead’ question in almost three years,” says Tapp.
“Interest rates are beginning to fall across the developed world, the Bank of Canada is increasingly winning the war against inflation, and businesses are expecting a soft landing, with employment growing modestly over the next three months. And while we have signs of good news, businesses remain worried about fragile supply chains due to ongoing labour disputes across Canada’s transportation network.”
A previous Zoho Canada Business Outlook Report by Zoho Corporation revealed a decline in business optimism among Canadian business leaders due to economic challenges.
