Economics
Inflation Worries Deepen in Canada With Firms Facing Labor Woes
- 70% of firms see price gains exceeding 3% over next two years
- Report bolsters bets Bank of Canada will hike by 50 points
Workers assemble a heavy duty drill shack at a mining equipment manufacturing shop in Parksville, British Columbia.
Photographer: James MacDonald/BloombergThis article is for subscribers only.
Canadian businesses are facing unprecedented challenges meeting demand, along with elevated expectations for wages and inflation that will bolster bets for aggressive rate hikes from the Bank of Canada.
The central bank’s quarterly survey of executives paints a picture of an economy still pressed up against its limits. Four-fifths of companies said they would have at least some difficulty meeting unexpected demand, a record. About 70% of respondents expect annual consumer price gains to surpass 3% over the next two years, also a record, with reports of higher expected wage growth pervasive.