A survey of business leaders belonging to the Chartered Professional Accountants (CPA) of Canada reflects growing pessimism about their businesses and the Canadian economy.The recent hold on interest rates by the Bank of Canada reflects the declining optimism among business leaders captured by CPA Canada’s Business Monitor for the third quarter of 2023. Whereas optimism overrode pessimism in the first two quarters of the year, pessimism now reigns.“The economy is no longer seen as resilient as higher interest rates make their way through the economy. GDP contracted in the second quarter and the summer months are looking stagnant,” says David-Alexandre Brassard, CPA Canada’s chief economist. “The historic surge in population has been behind the growth in spending and economic activities. The underlying economic weaknesses are now peeking through.”Business optimism is also softening somewhat, with 48% of respondents optimistic about the prospects for their businesses in the next year, compared to 56% last quarter.A total of 80% of respondents believe inflation is hurting their own company and almost half (49%) of all respondents believe inflation will continue to hurt their company for at least another year."Expectations on inflation remain high for businesses despite overall price levels and pricing for services, goods and food either came down or increased slower in September,” adds Brassard.“This disconnect between expectations and inflation numbers are also seen with consumers. This could also add pressure on wage growth, which is already high and is a continuing concern in the fight on inflation.”The pressures of higher interest rates are hard-felt: more than two-thirds of respondents (72%) believe current interest rates are having a negative impact on their company and 86% believe current interest rates are having a negative impact on the Canadian economy.The Bank of Canada announced October 25 that interest rates would remain at 5%.“After averaging 1% over the past year, economic growth is expected to continue to be weak for the next year before increasing in late 2024 and through 2025. The near-term weakness in growth reflects both the broadening impact of past increases in interest rates and slower foreign demand,” the bank announced.“CPI [Consumer Price Index] inflation has been volatile in recent months —2.8% in June, 4.0% in August, and 3.8% in September. Higher interest rates are moderating inflation in many goods that people buy on credit, and this is spreading to services." "Food inflation is easing from very high rates. However, in addition to elevated mortgage interest costs, inflation in rent and other housing costs remains high. Near-term inflation expectations and corporate pricing behaviour are normalizing only gradually, and wages are still growing around 4% to 5%. The bank’s preferred measures of core inflation show little downward momentum.”The bank projects CPI inflation will average 3.5% through the middle of 2024 and ease to 2% in 2025. Brassard doesn’t expect interest rate relief soon.“The bank is seeing moderating price pressures, but businesses have not yet returned to their normal price-setting behaviour. This indicates that interest rates could remain higher for longer to bring back price stability. The constraints of higher interest rates will continue to be felt by businesses and consumers, which in turn increases the risk of an economic slowdown.”.This is what the Western Standard is up againstThe Trudeau government is funding lies and propaganda by directly subsidizing the mainstream media. They do this to entrench the powerful Eastern, woke and corrupt interests that dominate the political, social and economic institutions in Canada. Federal authorities are constantly trying to censor us and stop us from publishing the stories that they don’t want you to read. Ottawa may weaponize our taxes and police against us, but we’ve got a powerful ally on our side.You. Free men, and free women. We need you to stand with us and become a member of the Western Standard. Here’s what you will get for your membership:Unlimited access to all articles from the Western Standard, Alberta Report, West Coast Standard, and Saskatchewan Standard, with no paywall. Our daily newsletter delivered to your inbox. .Access to exclusive Member-only WS events.Keep the West’s leading independent media voice strong and free.If you can, please support us with a monthly or annual membership. It takes just a moment to set up, and you will be making a big impact on keeping one the last independent media outlets in Canada free from Ottawa’s corrupting influence.
A survey of business leaders belonging to the Chartered Professional Accountants (CPA) of Canada reflects growing pessimism about their businesses and the Canadian economy.The recent hold on interest rates by the Bank of Canada reflects the declining optimism among business leaders captured by CPA Canada’s Business Monitor for the third quarter of 2023. Whereas optimism overrode pessimism in the first two quarters of the year, pessimism now reigns.“The economy is no longer seen as resilient as higher interest rates make their way through the economy. GDP contracted in the second quarter and the summer months are looking stagnant,” says David-Alexandre Brassard, CPA Canada’s chief economist. “The historic surge in population has been behind the growth in spending and economic activities. The underlying economic weaknesses are now peeking through.”Business optimism is also softening somewhat, with 48% of respondents optimistic about the prospects for their businesses in the next year, compared to 56% last quarter.A total of 80% of respondents believe inflation is hurting their own company and almost half (49%) of all respondents believe inflation will continue to hurt their company for at least another year."Expectations on inflation remain high for businesses despite overall price levels and pricing for services, goods and food either came down or increased slower in September,” adds Brassard.“This disconnect between expectations and inflation numbers are also seen with consumers. This could also add pressure on wage growth, which is already high and is a continuing concern in the fight on inflation.”The pressures of higher interest rates are hard-felt: more than two-thirds of respondents (72%) believe current interest rates are having a negative impact on their company and 86% believe current interest rates are having a negative impact on the Canadian economy.The Bank of Canada announced October 25 that interest rates would remain at 5%.“After averaging 1% over the past year, economic growth is expected to continue to be weak for the next year before increasing in late 2024 and through 2025. The near-term weakness in growth reflects both the broadening impact of past increases in interest rates and slower foreign demand,” the bank announced.“CPI [Consumer Price Index] inflation has been volatile in recent months —2.8% in June, 4.0% in August, and 3.8% in September. Higher interest rates are moderating inflation in many goods that people buy on credit, and this is spreading to services." "Food inflation is easing from very high rates. However, in addition to elevated mortgage interest costs, inflation in rent and other housing costs remains high. Near-term inflation expectations and corporate pricing behaviour are normalizing only gradually, and wages are still growing around 4% to 5%. The bank’s preferred measures of core inflation show little downward momentum.”The bank projects CPI inflation will average 3.5% through the middle of 2024 and ease to 2% in 2025. Brassard doesn’t expect interest rate relief soon.“The bank is seeing moderating price pressures, but businesses have not yet returned to their normal price-setting behaviour. This indicates that interest rates could remain higher for longer to bring back price stability. The constraints of higher interest rates will continue to be felt by businesses and consumers, which in turn increases the risk of an economic slowdown.”.This is what the Western Standard is up againstThe Trudeau government is funding lies and propaganda by directly subsidizing the mainstream media. They do this to entrench the powerful Eastern, woke and corrupt interests that dominate the political, social and economic institutions in Canada. Federal authorities are constantly trying to censor us and stop us from publishing the stories that they don’t want you to read. Ottawa may weaponize our taxes and police against us, but we’ve got a powerful ally on our side.You. Free men, and free women. We need you to stand with us and become a member of the Western Standard. Here’s what you will get for your membership:Unlimited access to all articles from the Western Standard, Alberta Report, West Coast Standard, and Saskatchewan Standard, with no paywall. Our daily newsletter delivered to your inbox. .Access to exclusive Member-only WS events.Keep the West’s leading independent media voice strong and free.If you can, please support us with a monthly or annual membership. It takes just a moment to set up, and you will be making a big impact on keeping one the last independent media outlets in Canada free from Ottawa’s corrupting influence.