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MNI BRIEF: Share of Canada Firms Hiking Prices Lowest In 2 Yrs


The share of Canadian firms planning to raise prices in the next three months has fallen to the lowest in just over two years according to a quarterly survey Monday from the federal statistics agency, welcome news for a central bank seeking evidence its 10 rate hikes are enough to tame inflation.

The proportion declined to 23.6% in the fourth quarter survey from 25.9% in the previous report, Statistics Canada's report said. It was the third consecutive decline from 32.9% in the first quarter of this year and down from a peak of 39% in the second quarter of 2022.

Bank of Canada officials say firms' extra pricing power during the pandemic rebound is one reason they remain concerned inflation could get stuck above their 2% target, though most investors see the policy rate remaining at 5% at the Dec 6 meeting. (See: MNI INTERVIEW: BOC To Delay Rate Cuts And Move Slow- Alexander) While inflation remains the top business obstacle cited by 56.9% of respondents, the share who said finding labor is a problem fell to 40.3% from 47.7%, a signal wage inflation could also moderate.

At a time when the Bank has said the "soft landing" path is quite narrow and private economists debate whether Canada has fallen into technical recession, StatsCan found "almost two-thirds (65.9%) of businesses reported being either very optimistic or somewhat optimistic about their future outlook over the next 12 months, virtually unchanged from the third quarter."

MNI Ottawa Bureau | +1 613-314-9647 |
MNI Ottawa Bureau | +1 613-314-9647 |

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