OTTAWA - Businesses continue to expect wage and price increases to be larger than normal, but they are shifting to closer to what they were before the pandemic, a new survey by the Bank of Canada suggests.
In its business outlook survey released Friday, the central bank said for the first time since the beginning of the pandemic businesses on balance expected slower wage growth over the next year.
Firms on balance also expected their input and output prices to grow at a slower rate over the next 12 months.
"Although firms still see cost pressures and labour shortages as top concerns, these have been mentioned less and less over the past year," the report said.
"In contrast, slowing demand has become a more important and widespread concern in recent quarters."
Overall, the business outlook survey indicator pointed to a negative sentiment as businesses continued to expect their sales growth over the next year to be weak, with one in five firms expecting an outright decline in sales.