Most Canadian businesses and consumers expect a recession in next 12 months: BoC surveys
CTV
More than 70 per cent of Canadian consumers and two thirds of business firms think a recession is likely in the next 12 months, according to Bank of Canada surveys.
More than 70 per cent of Canadian consumers and two thirds of business firms think a recession is likely in the next 12 months, according to Bank of Canada surveys.
Nearly one third of firms expect their rate of sales to decline over the next year, according to the Business Outlook Survey released by the central bank on Monday.
Businesses are attributing the slower demand to rising interest rates, reduced household spending and expectations for a recession. Compared to the last survey conducted by the central bank, fewer firms are reporting domestic demand as a driver to invest.
Despite an anticipated economic slowdown, most businesses think it will be mild. Nearly 70 per cent of firms expect their rate of sales to remain the same or grow over the next 12 months.
In December, the Canadian economy added 104,000 jobs. Firms are taking a more cautious approach to hiring, but still almost half of firms plan to add staff over the next year to meet demand.
“We don't expect to see a deep decline in economic activity,” said Pedro Antunes, the Conference Board of Canada chief economist. “Not recessions like we've seen in the past where the bottom falls out of consumer spending and we end up with job losses.”
The majority of Canadian consumers are finding it difficult to access credit, according to the BoC’s Canadian Survey of Consumer Expectations released on Monday. Wage growth expectations have dipped and nearly half of Canadian workers don’t expect their earnings to catch up to the recent inflation.
