Key takeaways:
- Bank of Canada surveys show how concerning inflation is in the minds of ordinary customers.
- Canadian firms and clients expect high inflation will stick around, affecting buying, selling, hiring, and firing.
According to two surveys from the Bank of Canada released Monday, Canadian companies and customers think the present era of high inflation will continue for longer than they’d expected.
The two words — the Business Outlook Survey and the Canadian Survey of Consumer Expectations — are the outcome of the central bank’s quarterly polling of Canadian businesses and clients for their perspectives on what’s happening in Canada’s economy.
While the results varied in a few ways, the prevailing theme was inflation and its effect on purchasing and selling, hiring and firing.
The main takeaway from the company survey was that most businesses are witnessing higher sales than before in the pandemic, as financial activity is returning to normal. But demand persists in outstripping supply across nearly all kinds of businesses, which is both an aspect of and a contributor to the high inflation presently afflicting the economy.
Read more: Kenney suggests the Alberta government will reveal plans for more inflation help
About two-thirds of businesses told the central bank they see labor shortages.
Almost half — 43 percent — say they are undergoing bottlenecks in their supply chains that take longer to fix than expected.
Businesses hope Canada’s inflation rate will still be more than five percent a year from now and almost four percent two years out. But five years from now, the survey means they anticipate the inflation rate to come back to within the range the central bank targets, between one and three percent.
It was a similar story on the customer side. Long-term inflation anticipations rose from 3.2 percent to four percent, while short-term anticipations grew to 6.8 percent, up from 5.1 percent last quarter.
Source – CBC News
