The Bank of Canada headquarters is shown in Ottawa, Wednesday, June 1, 2022. A new survey by the Bank of Canada suggests businesses continue to expect wage and price increases to be larger than normal, but they are shifting to closer to what they were before the pandemic. THE CANADIAN PRESS/Adrian Wyld
OTTAWA – A new survey by the Bank of Canada suggests businesses still anticipate larger-than-normal wage and price increases, but expectations are shifting closer to what they were before the pandemic.
In its business outlook survey, the central bank says that for the first time since the beginning of the pandemic, businesses on balance expect slower wage growth over the next year.
Firms on balance also expect their input and output prices to grow at a slower rate over the next 12 months.
Overall, the business outlook survey indicator pointed to a negative sentiment as businesses continue to expect their sales growth over the next year to be weak, with one in five firms expecting an outright decline in sales.
However, the survey for the second quarter found fewer firms expect an outright recession with one-third planning for a recession compared with half in the first quarter.
Meanwhile, the central bank’s Canadian survey of consumer expectations also suggests that while consumer inflation expectations for one and two years ahead have come down, they remain well above their pre-pandemic levels.
This report by The Canadian Press was first published June 30, 2023.
