Canada hit technical recession in 2023, small business group forecasts
Canada’s economy hit a technical recession at the end of 2023 and will continue to struggle to grow in the new year, according to forecasts from the Canadian Federation of Independent Business.
The CFIB projection released Tuesday suggests the Canadian economy contracted 0.2 per cent in the final quarter of 2023. Statistics Canada reported last year that real gross domestic product also contracted slightly in the third quarter.
If accurate, the two consecutive declines in real GDP would constitute a technical recession.
StatCan’s own projections for the fourth quarter of 2023 won’t be released until the end of February, though its latest GDP reports show economic growth was likely flat to start the third quarter with a possible uptick in November.
The CFIB forecasts have the Canadian economy rebounding with 0.5 per cent growth in the first quarter of the year.
CFIB chief economist and vice-president of research Simon Gaudreault said in a statement Tuesday that despite the forecasted Q4 downturn, the picture is a bit more “nuanced” than the headline figures suggest.
Business sales and employment continue to show signs of strength, he said, but indications of optimism from CFIB members are weak. Manufacturing businesses in particular are feeling increasingly pessimistic amid declines in demand both domestic and abroad.
Business investment plans, too, are at an all-time low in CFIB’s surveys. The organization said small businesses are less inclined to invest in their own operations under the weight of “general uncertainty, various cost pressures and tax increases.”
A lack of business investment has been hailed as a weakness in the Canadian economy, with experts recently telling Global News that dwindling spending here is
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