Market Update: We break down the business implications, market impact, and expert insights related to Market Update: Businesses still concerned about economy amid trade turmoil, BoC survey shows – Full Analysis.
One-third of businesses reported a decline in sales volumes over the past 12 months, above the historical average of about one-quarter.
Export challenges continue
While firms anticipate modest improvement, export sales growth faces obstacles. Most exporters said their goods comply with the Canada-United States-Mexico Agreement and are exempt from tariffs, but soft US demand and trade policy uncertainty have restrained sales.
A small but growing share of exporters reported increased sales to non-US markets in response to trade tensions. However, most firms have not diversified due to barriers such as equipment costs and regulatory requirements.
Investment and hiring cautious
Investment intentions edged up slightly, approaching long-term averages, though spending focused on routine maintenance rather than expansion. In the oil sector, investment is expected to decline in 2026 due to low prices.
The share of businesses planning workforce reductions rose to its highest level since 2016. Most firms reported sufficient physical capacity and labour for soft demand, with labour shortages and capacity constraints below historical averages.