Canadian companies say conditions are a little better than earlier this year, but they are still not ready to invest more money or hire new workers. The main reason is the negative impact of U.S. tariffs and trade tensions, which continue to slow down business growth.
The latest survey showed that while confidence among businesses has improved since the start of 2025, it still remains moderate. The business outlook indicator, which measures business activity and costs, rose slightly to -2.28 in the third quarter from -2.40 in the previous one.
The survey, conducted between August 7 and September 3, found that most firms do not expect strong sales growth in the coming year because tariffs are reducing demand. Still, a few companies said their sales expectations had improved a bit.
Around 33% of businesses believe that a recession might happen within a year, up from 28% in the previous quarter. These concerns about a possible downturn are keeping many companies from spending more or expanding.
Many businesses have decided to delay new projects and limit hiring. They say tariffs are making it harder to plan for the future.
Inflation expectations for the next year remain around 3%, almost the same as last quarter, but companies are facing higher costs. Most expect the prices of materials to rise faster in the next 12 months, while wage growth continues to slow.
A separate survey showed that 64.1% of Canadians expect a recession within the next year, almost the same as 64.4% in the last quarter.
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