Canadian economy continued modest growth in second quarter
The Canadian economy continued growing modestly in Q2 2024, according to the most recent Main Street Quarterly report from the Canadian Federation of Independent Business (CFIB) and AppEco, an economic consulting firm.
The report forecasts the Canadian economy grew by 2.0% in Q2, up slightly from 1.7% in Q1. The economy is estimated to continue growing at the same pace in third quarter, provided inflation remains in check.
The total consumer price index (CPI) inflation is forecasted to have dropped to 2.8% in Q2 and is expected to further decline to 2.4% in Q3.
The national private sector job vacancy rate, meanwhile, decreased to 3.3% in Q2, representing 458,000 unfilled positions.
“The decent growth in the economy in the first half of 2024 correlates with a recent uptick in long-term business optimism,” said Simon Gaudreault, CFIB's chief economist and vice-president of research. “While encouraging, it doesn't mean that all is well for small businesses. They're still grappling with steep cost increases on all fronts, including wage pressures, significant energy and fuel costs, and high interest rates.”
The report says business costs, measured by unit cost, remain very high. Total unit costs were stable before the pandemic but spiked by 26% in 2022 and have stayed elevated.
General uncertainty and cost pressures are also reducing small businesses’ ability to invest. After a surprise spike in Q1, private investment dropped to 2.8% in Q2.