The Bank of Canada recently released its Q4 2022 business outlook survey, the results of which show a pretty pragmatic view of the Canadian economy, and what to expect in the months and year ahead.
Highlights:
- Most businesses surveyed expect a mild recession in at least the first half of the year
- About 30% expect sales to decline this year/70% expect sales to be about the same
- Reasons for slowing demand correlate with the consumer survey, namely pessimism around interest rates, uneasiness about employment stability, and concern about inflation
Based on this information, what should an SMB do this year?
- Clearly, it’s going to be a challenging year – it’s always a good time to find waste and cut it out of your operation.
- If sales are going to be static, it might be a good time to find/develop new products/services to lock in your customers for longer commitments, and at slightly higher average spends (always focusing on providing new value)
- If you’re one of those businesses expecting a decline in sales, now is a good time to reach out to new geographies (which might be as simple as a neighbouring town), improve your digital-service capability, and reach new prospects digitally
You may also be interested in reading:
- This interview in today’s Globe and Mail, by Jennifer Dowty, with Benjamin Tal, Deputy Chief Economist of CIBC:
Another rate hike, house price declines and a stock market gaining traction in the second half: What CIBC’s Benjamin Tal expects for 2023
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