One in three businesses in the country expects their profitability to decline over the next quarter, even though many expect to increase the price of goods and services invoiced.
This is revealed by the Canadian Survey on the Conditions of Business, conducted from January to February.
The newspaper reported a slowdown in some retail businesses on Saturday, while in furniture, in particular, inventories are high. Promotions are back to attract consumers, who have become more price-conscious with inflation.
In the last quarter of 2022, 28% of Canadian businesses recorded declining revenues (1% to 49% decrease). The sectors of activity where the decline in income affects a greater proportion of businesses are finance and insurance (29%), retail trade (28%), transportation and warehousing (26%).
More expensive raw materials
While nearly three out of 10 companies are posting declining revenues, the price of raw materials purchased by manufacturers continues to rise, albeit more slowly. The year-over-year increase was 1.2% in January, following a 7.5% increase in December. For wages, the increase was 4.5% in January compared to the same month in 2022.
Rising inflation is the main headwind businesses expect over the next three months, particularly businesses in the mining, quarrying, and oil and gas extraction sectors. gas (67.6%), accommodation and food services (67.5%) and agriculture, forestry, fishing and hunting (64.6%).
To deal with rising interest rates, which are affecting business finances, 11% plan to reduce their workforce, 21% will postpone hiring, 31% will choose to slow down their investments, while 48% will pass the bill on to consumers. , by increasing the selling price of their goods and services.