Q1 2024 Business Conditions Report

Q1 2024 Business Conditions Report

The Canadian Chamber of Commerce’s Business Data Lab has released their Business Conditions Report for the first quarter of 2024. This is a quarterly report that seeks to understand how businesses of various types and sizes feel about the economy and their current condition within the business landscape. When looking at various economic indicators compared to the Q4 report of 2023, the Canadian economy has seen some steady growth however, general business sentiment remains low with persistent concerns about growing costs and lack of personal spending. 55% of all businesses are also still concerned with inflation and 41% are struggling with interest rates and debt costs suggesting that borrowing costs have become too high. These concerns are mostly seen in micro businesses (less than 5 employees) which on average have reported a deteriorating sentiment on their business conditions for the next year. Some positive changes have taken place however, with only 23% of businesses reporting an issue with labour shortages and 22% concerned with retaining skilled employees. These concerns remain highest in the construction and infrastructure industries with 37% of businesses reporting labour shortages but these concerns should trend down throughout the year. The Consumer Price Index has also fallen to 2.8% which puts it on target for the Bank of Canada’s ideal range of 1-3%. Despite this correction, the number of businesses that are expecting to increase prices has risen from 24% last quarter to 25% this year. In Ontario and BC, there is also a trend between decreased business expectations and unaffordable housing which could tie in with the growing concerns about cost and consumer demand. This report seems to suggest that general economic indicators are trending in the right direction but overall business sentiment is not following these trends and they may not follow them until business costs can be reduced and consumer demand rebounds.