The Canadian Federation of Independent Business (CFIB) says the Canadian economy is expected to avoid a recession in the third and fourth quarters of 2023 – but only just. The latest Main Street Quarterly report by the CFIB forecasts economic growth of just 0.3 per cent in the third quarter of 2023. This is expected to rebound slightly to 1.4 per cent in the fourth quarter of this year.
Consumer Price Index (CPI) inflation, meanwhile, both total and excluding food and energy is expected to climb slightly in the third quarter and recede again in the fourth. “It will remain slightly above the Bank of Canada’s inflation control target range of one to three per cent,” they state in an announcement about the publication of the quarterly report. “Total CPI even rebounded slightly in Q3 from 3.5 per cent to 2.6 per cent. Should inflation remain sticky around three per cent, the Bank of Canada may want to hike rates one more time in 2023. However, the full effect of previous rate hikes has yet to completely materialize in the economy, calling for patience,” the report’s authors state.
Job vacancies are also discussed. These are trending downward slightly but still remain at 4.2 per cent in the third quarter. “This represents 594,900 unfilled positions,” they add. Saskatchewan, Quebec and Manitoba businesses recorded the highest job vacancy rates of 4.9 per cent, 4.7 per cent and 4.6 per cent, respectively. Those with job vacancies intend to raise wages by 3.1 per cent in the coming year while those without job vacancies intend to raise wages by 2.2 per cent.
Business owner clients are also up against steep increases in commercial rents. They say among those surveyed who pay rent, 51 per cent of businesses were handed rent increases of six per cent or more in the past 12 months; 33 per cent considered moving, while another seven per cent actually relocated their businesses in the past year.