Businesses continue to face obstacles

Real gross domestic product edged up 0.1% in February, following a 0.6% increase in January, says Statistics Canada in its ‘Canadian Survey on Business Conditions.’ The survey, conducted from April to early May, shows businesses expect to face a variety of obstacles. Inflationary pressures remained higher compared with recent historical trends, as the Canadian Consumer Price Index (CPI) rose 4.4% year over year in April, but remained lower than the peak in June 2022 (8.1%). Also in April, employment rose by 0.2%, while the unemployment rate held steady at 5%, just above the record low of 4.9% reached in June and July 2022. Businesses said that although the challenges are easing, they expect to continue to face a variety of obstacles over the next three months related supply chains, rising inflation, and rising cost of inputs, as well as those related to hiring and retention. Inventory levels are concerning to 22.9% of businesses, with difficulties of acquiring inputs, product, or supplies. As well, half of businesses expect their operating expenses are expected to increase, nearly three in 10 expect profitability to decrease, and three in 10 also expect to increase the prices they charge.