“Key macroeconomic indicators, such as GDP, retail sales and inflation, appear to be moderating,“ said Simon Gaudreault, CFIB’s chief economist and vice president of research. ”We forecast that Q3 inflation, both total and core, will be within or likely very close to the Bank of Canada’s inflation-control target range of 1 to 3 percent.”
The report said that Consumer Price Index (CPI) inflation, both total and excluding food and energy, is expected to continue its downward trajectory, with projections indicating 3.3 percent and 3.7 percent for the second quarter, and 2.4 percent and 2.6 percent for the third quarter respectively.
But private investment declined by 1.7 percent in the second quarter. According to the CFIB, the slowdown was due to “lower business sentiment, elevated expectations regarding wage increases, as well as fewer unfilled orders compared to the beginning of the year.” It anticipated that business investment will renew with growth in the third quarter, but remain lower than a year ago.
Canada’s national job vacancy rate also maintained its elevated trend in the second quarter, declining just 0.1 percent to 4.6 percent. According to the CFIB, there are a total of 656,900 unfilled positions, with businesses in Quebec (5.3 percent) and New Brunswick (5.1 percent), as well as those in the personal services (7.5 percent), construction (6.5 percent), and hospitality (5.8 percent) sectors having the highest vacancy rates.
“We’re not seeing much change quarter-over-quarter and vacancy rates remain well above previous historical peaks, but on the year-over-year comparison, we can see some easing in labour markets,” said CFIB economist Laure-Anna Bomal.
Employment growth turned negative at minus 1.0 percent in the second quarter of 2023, which the CFIB said was mainly due to the federal workers’ strike. It said a rebound can be expected in the third quarter of 2023, “although the growth rate should be more moderate than a year ago.”
The CFIB is Canada’s largest association of small and medium-sized businesses. It has over 97,000 members across every industry and region of Canada, and is dedicated to “increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings.”
