Most Canadian businesses plan to hire in next year despite recession fears: BoC survey – National | Globalnews.ca

Most Canadian businesses expect to grow their payrolls over the next 12 months even as they brace for a possible recession, according to a survey from the Bank of Canada.

The central bank’s third quarter Business Outlook Survey released Monday showed that most businesses in Canada intend to keep hiring through the next 12 months, while a “growing minority” plan to maintain current staffing levels.

Business leaders responding to the survey, conducted between Aug. 15 and Sept. 9, cited difficulty finding skilled workers as the biggest impediment to their hiring plans.

The latest jobs figures from Statistics Canada showed the country’s labour force remained tight in September with the unemployment rate ticking down slightly to 5.2 per cent.

Overall business sentiment has softened in Canada, the central bank’s survey showed, with many firms expecting slower sales growth amid rising interest rates and cooling demand.

A majority of businesses surveyed now think a recession is likely in the next 12 months.

While there are early signs that pressures on prices and wages are easing, business inflation expectations remain high, the survey showed. Consumers, meanwhile, expect faster rising prices in the near term, though longer-term expectations have eased, a separate survey found.

Despite the grim outlook, business sentiment remains positive. Firms linked to housing activity expect higher rates to hurt their sales, while others now anticipate a slower — though still healthy — pace of sales growth, the survey found.

“While many firms anticipate a recession, those not linked to housing activity and other household consumption do not expect it to have a large impact on demand for their products and services,” the report said.

The majority of consumers also expect a recession in the next 12 months. The Bank of Canada has hiked its policy rate by 300-basis points since March, with money markets betting on another 50-bp increase to 3.75 per cent at its next decision on Oct. 26.

— With files from Reuters

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