Message from the Chief Economist

As we close out 2024, the latest findings from the Canadian Survey on Business Conditions offer a timely view of the business outlook across the country.

Unfortunately, the year is ending on a low note as our Business Expectations Index slipped further into negative territory in the fourth quarter. This reflects weaker near-term prospects for sales as businesses are increasingly concerned about inadequate consumer demand.

Much like our winter weather, the regional economic picture fluctuates significantly across the country, underscoring the varied experiences of businesses. The outlook in Quebec and Atlantic Canada continues to show areas of relative business stability, while Ontario and British Columbia keep struggling, especially in the large metros of Toronto and Vancouver.

The sectoral results reveal a few optimistic sectors, such as healthcare, professional services, and finance, amid the many more industries that are anything but cheery, particularly construction, accommodation and food services, and transportation. By firm size, the smallest “micro” firms (1-4 employees) have a very weak outlook, while businesses with more than 20 employees are much more chipper.

On obstacles, cost pressures remain prevalent but are nonetheless improving, while there’s some good news from the normalizing of firm pricing behaviour as inflation has come back under control. With the unemployment rate picking up and labour market slack building, labour challenges continue to ease.

Looking ahead, we can’t sugarcoat the fact that many businesses are feeling cautious and uncertain, but ultimately these forthcoming challenges also bring opportunities to innovate and demonstrate resilience. By understanding the evolving landscape, we can help Canadian businesses navigate this challenging period of uncertainty and prepare for a brighter future.