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Canadian Business Conditions Deteriorate: Survey

Statistics Canada’s latest Survey on Business Conditions found that organizations nationwide continue to face numerous obstacles related to supply chains, rising inflation, and higher costs.

One in five (20%) of businesses say they are facing challenges maintaining inventory levels or acquiring inputs, products or supplies, either domestically or from overseas.

Nearly one-quarter (25%) of Canadian businesses expect these challenges to worsen in the next three months.

Nearly half (50%) of businesses said they also expect their operating expenses to increase in the coming months.

One-third (33%) of businesses expect their profitability to decrease, and one-quarter (25%) expect to increase the prices they charge in the near-term.

Among business owners, the majority continue to say that rising inflation is their biggest challenge.

That said, the pressures faced by Canadian businesses continue to ease compared to 2022, said Statistics Canada.

Real gross domestic product (GDP) rose 0.3% in May, following a 0.1% increase in April.

While inflation in Canada remains higher than historical norms, rising 3.3% year-over-year in July of this year, it remains much lower than the peak of 8.1% reached in June 2022.

Among businesses, higher costs for insurance (up 34.7%), transportation costs (up 29.7%), and real estate (up 29.4%) are weighing on their operations.

The most recent business conditions survey was conducted from July 4 to August 8, 2023, and respondents were asked what their expectations are over the coming three months.