Canadian Economy to See Modest Growth in the First Half of the Year: CFIB Forecast

Canadian economy to see modest growth in the first half of the year: CFIB forecast
 Courtesy Canadian Federation of Independent Business

Courtesy Canadian Federation of Independent Business

The Canadian economy is expected to see positive growth in Q1 and Q2 2024, according to the latest Main Street Quarterly report by the Canadian Federation of Independent Business (CFIB). 

Key highlights of the Main Street Quarterly report for Q1 2024: 
  • CFIB’s forecasts in partnership with AppEco suggest the Canadian economy rebounded to 0.8% in Q1 2024 and will grow to 0.9% in the second quarter on a year-to-year basis. Consumer Price Index (CPI) inflation, both total (2.8%) and excluding food and energy (2.9%), continued its downward trend in Q1 and this trend is expected to persist in Q2. Driven by low long-term small business confidence, private investment contracted for the third consecutive quarter in Q1. It’s expected to keep declining in Q2, although at a slower pace.  
  • The national private sector job vacancy rate declined to 3.5% in Q1. This represents 496,700 unfilled positions. 
  • Our special analysis on insufficient demand this quarter shows that it is at the highest level since the pandemic, affecting half of SMEs. Businesses facing a lack of demand are also more cautious with their price increase plans.  
  • The quarterly sectoral profile of transportation businesses, which are facing labour shortages and various cost constraints, reveals they are experiencing the highest exit rate in the last 10 years, while entries on the market are stagnant. The long-term confidence level in the industry is also reaching its lowest level since the pandemic.  


Conclusions by CFIB’s chief economist and vice-president of research, Simon Gaudreault: 
  • All eyes were on the Bank of Canada this week ahead of its monetary policy decision on Wednesday. As widely expected, the Bank took a wait-and-see approach for a sixth consecutive time and didn’t announce any rate cuts. With more signals showing that inflation is generally getting under control, there’s bigger pressure on the Bank to lower rates in the near term. The Bank’s restrictive policy is not going to help SMEs in the next few months as they’re continuing to face headwinds as shown by a decrease in investment and a high level of insufficient demand. 

  • Our forecasts suggest that the economy will see positive growth in early 2024. However, business owners remain modestly optimistic about the future of their business and will be watching the upcoming federal budget closely for any sign of meaningful cost relief, as well as the start of widely anticipated interest rate cuts in the upcoming months that could improve sales and lower financing costs. 

Read the full Main Street Quarterly

The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 95,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at

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