Nearly three-quarters (73.1%) of businesses are either very optimistic or somewhat optimistic about their future outlook over the next 12 months. The proportion of businesses reporting an optimistic future outlook has consistently remained above 70% since the second quarter of 2024, according to a report released Friday by Statistics Canada.
“Meanwhile, 16.7% of businesses expect their sales of goods and services to increase over the next three months, consistent with 16.6% in the fourth quarter of 2024. This was led by businesses in retail trade (24.4%); manufacturing (23.4%); and arts, entertainment and recreation (19.8%). At the same time, 24.8% of businesses expect to raise the prices of their offered goods and services over the next three months,” explained the federal agency.
“Businesses continue to anticipate a variety of obstacles over the next three months, mainly those related to costs and labour. While pressures of both cost- and labour-related obstacles continue to ease in the first quarter, the proportion of businesses with a positive outlook remains over 70%.”
Cost-related obstacles remain a concern for the majority of businesses
While cost-related obstacles are expected by over three-fifths (62.5%) of businesses across Canada over the next three months, there has been a slight easing of pressures, with the proportion of businesses falling from nearly two-thirds (65.7%) in the fourth quarter of 2024, said the report.
Cost-related obstacles consist of inflation; the cost of inputs; interest rates and debt costs; the cost of insurance; costs of real estate, leasing or property taxes; and transportation costs.
“In this context, inflation (46.4%) is the most commonly expected obstacle by businesses over the next three months. Businesses in accommodation and food services (68.3%); arts, entertainment and recreation (56.9%); and retail trade (56.5%) were most likely to expect inflation to be an obstacle, said StatsCan.
Labour cost is the most commonly anticipated input businesses expect to be an obstacle
Statistics Canada said over one-quarter (26.7%) of businesses anticipate cost of inputs to be an obstacle over the next three months. Of these businesses, over three-fifths (61.6%) specified labour cost as an input they expect to be an obstacle, led by businesses in health care and social assistance (89.8%); arts, entertainment and recreation (84.3%); and information and cultural industries (76.1%).
“Meanwhile, 43.8% of businesses across Canada expect to increase wages over the next 12 months, with an average wage increase of 7.0%. This is comparable to the expected average wage increase of 7.4% from the first quarter of 2024. Businesses in retail trade (52.9%); manufacturing (52.3%); and accommodation and food services (51.5%) were most likely to expect to increase wages. On the other hand, over two-fifths (44.6%) of businesses expect wages to stay the same, and a further 3.1% expect a decrease in wages,” it said.
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