After a tough 2023, a majority of 417 CEOs of Canada’s small and medium-sized companies don’t expect much respite this year. Cost pressures remain a challenge and most say they will increase prices for goods and services in 2024 to maintain profitability, according to the latest quarterly CEO Confidence Survey by TEC Canada.
TEC Canada President and CEO Todd Millar said the latest survey shows that the belt-tightening reported in the Q4 2023 survey is continuing.
“As reported in an analysis of our survey findings by Dr. Peter Andersen, an independent consulting economist and former Assistant Chief of the Bank of Canada’s Research Department, weaker economy, high interest rates and tighter credit conditions are taking their toll on business confidence for small and medium-sized firms,” said Millar. “Last year was a tough one, with a sizeable majority of respondents – 63 per cent –saying business conditions worsened over the 12 months ending December.
“Dr. Andersen notes that the absence of widespread layoffs is a key reason why a ‘soft landing’ is a possible outcome in 2024. This would be slow growth but not an outright contraction. The ability to stay employed has allowed consumers and homeowners to withstand the impact of current high interest rates.
“The main message is that demand for workers is holding up. Approximately half of the respondents – 47 per cent– plan to increase payroll employment over the next 12 months.”
Tima Miroshnichenko
Key findings from the report:
- In British Columbia 75 per cent of respondents reported worsening business conditions in 2023, followed closely by Quebec at 71 per cent;
- The outlook for 2024 is slightly better with only 45 per cent of respondents nation wide expecting another year of deteriorating economic conditions. The outlook in Quebec is least favourable with 62 per cent of respondents expecting conditions to worsen;
- 74 per cent of respondents across Canada expect profits to stay the same as they were in 2023 or improve based in part on the belief that cost increases can be passed on to customers;
- Supply chain shortages are reported by 72 per cent of respondents to have diminished. However, despite a positive outlook for firms’ sales volumes, the majority of respondents – 76 per cent –do not feel a need to add to inventories in 2024;
- Most respondents – 58 per cent – believe Canada is either already in a recession or will be soon. The figure is highest among B.C. respondents at 63 per cent followed by Quebec (60 per cent), Ontario (59 per cent) and Alberta (54 per cent);
- While all respondents anticipate economic headwinds in 2024, 39 per cent believe Canada is already in a soft landing or will soon be. A majority – 56 per cent –expect the Bank of Canada to begin cutting interest rates, either this spring or summer. Respondents’ median expectation has inflation pegged at three per cent this year, down from four per cent in the Q4 2023 survey;
- Good news for workers is that most respondents – 64 per cent – say there will be no lay-offs this year although 29 per cent have already cut their workforces or are considering staff reductions with this figure rising to 34 per cent in B.C.;
- A strong majority of respondents – 61 per cent – say it is not getting easier to fill open jobs, although respondents are now more cautious on hiring with 14 per cent planning to decrease employment compared to 10 per cent in the Q4 2023 survey.
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list
About Us
Canada’s Podcast is the number one podcast in Canada for entrepreneurs and business owners. Established in 2016, the podcast network has interviewed over 600 Canadian entrepreneurs from coast-to-coast.
With hosts in each province, entrepreneurs have a local and national format to tell their stories, talk about their journey and provide inspiration for anyone starting their entrepreneurial journey and well- established founders.
The commitment to a grass roots approach has built a loyal audience on all our social channels and YouTube – 500,000+ lifetime YouTube views, 200,000 + audio downloads, 35,000 + average monthly social impressions, 10,000 + engaged social followers and 35,000 newsletter subscribers. Canada’s Podcast is proud to provide a local, national and international presence for Canadian entrepreneurs to build their brand and tell their story.
