Bank of Canada Reports Point to Rising Inflation Expectations for Business and Consumers
Canadian businesses and consumers think the current era of high inflation will persist for longer than they’d previously hoped, according to two surveys from the Bank of Canada released Monday.
The two reports — known as the Business Outlook Survey and the Canadian Survey of Consumer Expectations — are the result of the central bank’s quarterly polling of Canadian businesses and consumers for their outlook on what’s happening on the ground in Canada’s economy.
The dominant theme of both was inflation and the impact it is having on buying and selling, hiring and firing.
The main takeaway from the business survey was that most businesses are seeing higher sales than they were seeing earlier in the pandemic, as economic activity is returning to some sort of normal. But demand continues to outstrip supply across almost all types of businesses, which is both a factor of and a contributor to the high inflation currently plaguing the economy.
Nearly two-thirds of businesses told the central bank they are seeing labour shortages. Nearly half — 43 per cent — say they are experiencing bottlenecks in their supply chains that are taking longer to resolve than previously anticipated.
On the employment front, on average, business owners expect their labour costs to increase by 5.8 per cent this year.
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