Business Data Lab
Everyone wanted 2024 to close out on a high note. Unfortunately, the Business Expectations Index, which captures the short-term outlook according to Canadians businesses, dipped lower into negative territory, ending at 96.4 (anything below 100 indicates deteriorating sentiment).
Business Outlook
While many businesses remain hopeful for the year ahead (over 70%), since last quarter, the percentage of optimistic businesses declined by 5 percentage points, pessimistic businesses similarly increased.
The Most Optimistic Businesses in Canada…
- Are in Quebec and Atlantic Canada, and the cities of London and Quebec City
- Are in the industries of healthcare, professional services, finance and insurance, and information and culture
- Are mature firms (20–99 employees)
- Are owned by members of the LGBTQ2 community
The Most Pessimistic Businesses in Canada…
- Are in Ontario and British Columbia and the cities of Ottawa, Windsor, Vancouver and Toronto
- Are in the industries of transportation, accommodation and food services, and construction
- Are micro firms (1–4 employees)
- Are owned by person with a disability or First Nations, Métis or Inuit people
Summary table and charts
Out of the 22 cities included on the Business Expectations Index, Halifax, Sherbrooke and Quebec City have been the most optimistic over the past three years. On the other hand, Toronto, Windsor and Vancouver have historically been the most pessimistic.
Obstacles
Cost-related pressures remain the most prevalent near-term obstacle for business. However, after significant progress on restraining inflation, firms’ pricing behaviour has largely normalized, with only 13% of businesses now expecting to raise prices in the next quarter. And although short-term labour obstacles remain challenging for nearly half of firms in administration, accommodation and food services, retail, and manufacturing industries, consumer demand exceeded labour for the first time in over three years.
Borrowing
Inflation is back to the Bank of Canada’s 2% target and has been within the Bank’s desired range for the first 10 months of 2024. While many small businesses continue to struggle with borrowing costs, the situation has started improving alongside the Bank’s interest rate cuts, as inflation has come back to target.
