CFIB highlights modest economic growth and decreasing inflation in Q2 2024, with ongoing challenges
The Canadian Federation of Independent Business (CFIB) reports that the Canadian economy experienced modest growth in Q2 2024.
The latest Main Street Quarterly report highlights several key findings.
CFIB, in collaboration with AppEco, forecasts a 2.0 percent growth in the Canadian economy for Q2, following a 1.7 percent increase in Q1. They predict a similar growth rate for Q3, provided inflation remains controlled and the central bank continues to cut rates.
The Consumer Price Index (CPI) inflation dropped to 2.8 percent in Q2 and is expected to decrease further to 2.4 percent in Q3. The national private sector job vacancy rate fell to 3.3 percent in Q2, leaving 458,000 positions unfilled.
The report's sectoral profile examines personal services firms, revealing that high borrowing and product input costs are impacting repair, maintenance, and personal care businesses.
Additionally, the report includes an analysis of the high cost of doing business, noting that overall business costs, measured by unit cost, remain elevated. Although stable before the pandemic, these costs surged by 26 percent in 2022 and have stayed high since.
Simon Gaudreault, CFIB's chief economist and vice-president of research, notes that the economic growth in the first half of 2024 has led to increased long-term business optimism.
However, small businesses still face significant challenges, including wage pressures, high energy and fuel costs, and elevated interest rates. These cost pressures and general uncertainty are limiting small businesses' ability to invest.
After a surprising increase in Q1, private investment dropped to 2.8 percent in Q2.
