Companies expect to increase their selling prices, but more slowly than in the last 12 months as the increase in their costs slows.
This is according to the Bank of Canada’s Business Outlook and Entrepreneur Pulse survey released on Monday.
About half of respondents said their pricing practices had not yet returned to normal, it said. Overall, companies continue to intend to implement larger and more frequent price increases than before the COVID-19 pandemic. However, they expect their selling prices to rise more slowly than in the last twelve months as the increase in their input costs slows.
The survey also shows that the negative effects of interest rate increases are spreading. “A larger number of companies believe that higher interest rates will limit their sales and hinder their investment plans over the next 12 months,” notes the Bank of Canada.
Companies therefore intend to hire fewer staff, but few are planning to lay off employees. Wage growth is expected to remain higher than usual despite the decline in demand, according to the survey.