Despite short-term challenges, longer-term business sentiment at highest level in almost three years

OTTAWA, Sept 17, 2024 – 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, according to a new report from the Canadian Chamber of Commerce’s Business Data Lab (BDL).

In the latest Canadian Survey on Business Conditions report, the BDL’s analysis reveals that longer-term business optimism rose for the third straight quarter. “In fact, this is now the best showing for the “year-ahead” question in the almost three years,” says Stephen Tapp, Chief Economist at the Canadian Chamber of Commerce.

“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.”

The positive long-term sentiment from the CSBC contrasts a 3.4 point decline in short-term business sentiment for Q3, with weaker outlooks for sales and employment dragging down the headline number. Nevertheless, new evidence shows that cost pressures are moderating, and firms’ pricing behaviour is normalizing.

“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 Tapp. “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.”

The report underscored a gloomier outlook in Ontario and British Columbia ─ particularly in Toronto and Vancouver, where high housing prices and associated debt levels, along with impending mortgage renewals, are weighing heavily on consumer spending. Conversely, businesses were more optimistic in Quebec and Atlantic Canada, markets that haven’t suffered as much with housing affordability challenges.

Indigenous-owned firms in Canada stood out as particularly optimistic about their future business opportunities.

About the Canadian Chamber of Commerce — The Future of Business Success
The Canadian Chamber of Commerce is Canada’s largest and most activated business network — representing over 400 chambers of commerce and boards of trade and more than 200,000 business of all sizes, from all sectors of the economy and from every part of the country — working to create the conditions for our collective success. The Canadian Chamber of Commerce is the undisputed champion and catalyst for the future of business success. From working with government on economy-friendly policy to providing services that inform commerce and enable trade, we give each of our members more of what they need to succeed: insight into markets, competitors and trends, influence over the decisions and policies that drive business success and impact on business and economic performance.

Contact
Karl Oczkowski
Senior Director, Corporate Communications and PR
613.238.4000 (2231)
koczkowski@chamber.ca