Bank of Canada Business, Consumer Surveys Still Paint Bleak Picture for Economy, Says CIBC

11:31 AM EDT, 10/20/2025 (MT Newswires) -- The Bank of Canada's Q3 business and consumer surveys continued paint a downbeat picture of the economy, with only marginal improvement in some indicators relative to the prior quarter, said CIBC.

With the surveys also suggesting that inflation expectations are relatively well contained, Monday's data provides further support for another 25bp rate cut from the Bank of Canada next week, stated CIBC.

Businesses reported a continued rebound in overall sentiment from the very low levels recorded at the start of the year, although respondents to the BoC Business Outlook Survey (BOS) on balance were slightly negative on their views of future sales growth.

The balance of opinion regarding export sales continued to worsen. The proportion of firms facing capacity constraints remained below the long-run average, and despite some improvement in hiring plans relative to the prior quarter, the majority of firms continued to state that they don't plan to hire new employees.

While input price inflation is still expected to accelerate, inflation in output prices is expected to remain stable with weak demand cited as a constraint to passing on cost increases. Firms' overall expectations for future inflation were generally slightly lower than a quarter ago, added CIBC.

In the consumer survey, there was a further deterioration in households' view of the labor market, particularly job finding prospects in the public sector. Views of overall financial health improved relative to the prior quarter, but remained weak, pointed out the bank.

Expectations for short-term inflation were little changed, although at levels above where they typically stood prior to 2020, and longer-term expectations shifted a little higher. However, many attributed this to the expected impact of United States tariffs on limiting the ability of the BoC to control inflation, according to the bank.

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