Despite consistent reassurance from Bank of Canada policy makers that price pressures are merely transitory, it appears that an increasing number of businesses are anticipating a deteriorating inflation landscape.
According to survey results published by the Canadian Federation of Independent Business (CFIB), small and medium-sized companies across Canada revealed they plan to raise their prices by an average of 3.8% over the next 12 months, more than double the normal average, and the highest on records dating back to 2009.
The survey also found that the ongoing global supply chain disruptions are likely not going to dissipate anytime soon. Approximately 43% of businesses said they are currently facing elevated input costs, which is the highest proportion on record, and also twice the historical average.
July’s inflation rate soared to 3.7% from year-ago levels, marking the highest since 2011, and significantly above the central bank’s target range of 1% to 3%. Despite this, though, Bank of Canada policy makers insist that price pressures are only temporary, and will abate in the near term. However, as the survey’s results suggest, it’s increasingly beginning to look like inflation will likely persist well into 2022, dispelling any temporary factors.
Information for this briefing was found via the CFIB. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
