Goods Exporters Now Trailing Other Businesses in Optimism: Canadian Chamber of Commerce
Canadian businesses are facing a growing wave of uncertainty, with confidence levels remaining weak for the third consecutive quarter, according to the latest Business Insights Quarterly report from the Canadian Chamber of Commerce’s Business Data Lab (BDL). A notable shift in sentiment has emerged, with goods exporters—once a beacon of optimism—now trailing other industries in confidence.
This marks a significant change in mindset. Since Q3 2021, goods exporters have consistently been more optimistic than the broader business community. However, this trend reversed in late 2024, driven by a combination of challenges, including rail and port strikes, supply chain disruptions, and rising trade policy uncertainty.
Regional disparities are also evident. Ontario, particularly Southwestern Ontario—encompassing areas like Oshawa, London, and Hamilton—stands out as the least optimistic province. This is largely attributed to the impact on trade-exposed industries, which are particularly vulnerable to disruptions and global economic shifts.
Another key finding is the reversal in pricing expectations. After a year of declining expectations, more businesses now anticipate raising prices. This shift is likely linked to new tariff measures, adding pressure on companies to adjust their pricing strategies to maintain profitability.
Weak consumer demand has emerged as a top concern for businesses, surpassing labor shortages for the second consecutive quarter. This signals a broader slowdown in spending and heightened uncertainty in global trade, impacting everything from production levels to inventory management.
Supply chain challenges, once thought to be improving, are reemerging as a major issue. Nearly 40% of goods exporters expect conditions to worsen over the next six months, citing ongoing struggles to secure essential inputs both domestically and internationally.
Last year’s labor disruptions at ports and railways had a ripple effect, directly impacting 180,000 businesses. These events underscored the fragility of Canada’s trade infrastructure and the interconnected nature of global supply chains.
Patrick Gill, Vice President of the Business Data Lab, highlighted the mounting challenges businesses face amid rising trade tensions. “Supply chains are strained, tariff-driven price pressures are rising, and businesses, especially exporters, are struggling to stay afloat,” he noted.
Despite these headwinds, nearly three-quarters (73%) of businesses remain optimistic about the year ahead. However, the Canadian Chamber of Commerce cautions that optimism alone is not a solution. Real, actionable measures are needed to navigate the unpredictable economic landscape.
As the voice of over 400 chambers of commerce and boards of trade, representing more than 200,000 businesses across Canada, the Canadian Chamber of Commerce continues to advocate for conditions that foster collective success. Its mission is to provide businesses with critical insights into markets, competitors, and trends, while influencing policies that drive prosperity and delivering tangible impact on business and economic performance.
Deeper Insights into Canada’s Business Landscape
The latest findings from the Canadian Chamber of Commerce’s Business Data Lab reveal a complex interplay of challenges affecting businesses nationwide. Goods exporters, once the backbone of economic optimism, are now grappling with diminished confidence, signaling broader economic concerns. This shift, precipitated by rail and port strikes, supply chain disruptions, and uncertain trade policies, underscores the fragility of Canada’s trade infrastructure.
Ontario, particularly Southwestern Ontario, emerges as a hotspot of economic distress, with trade-exposed industries bearing the brunt of global shifts. The decline in optimism among goods exporters hints at a ripple effect impacting regional economies, where industries reliant on international trade are most vulnerable.
The resurgence of supply chain challenges, with 40% of goods exporters anticipating worsening conditions, paints a grim picture. These disruptions, coupled with the lingering effects of last year’s labor stoppages at ports and railways, which impacted 180,000 businesses, highlight the precarious state of Canada’s trade infrastructure. The interconnected nature of global supply chains means that local disruptions can have far-reaching consequences, affecting production timelines and inventory management across sectors.
Rising costs and new tariff measures are compelling businesses to reevaluate their pricing strategies, reversing a trend of declining price expectations. This shift not only reflects the immediate challenges of maintaining profitability but also signals a potential inflationary pressure as businesses pass on increased costs to consumers. The interplay between tariff-driven price pressures and weakening consumer demand creates a challenging environment where businesses must balance profitability with affordability.
Weak consumer demand has emerged as a paramount concern, surpassing labor shortages for the second consecutive quarter. This shift reflects a broader slowdown in spending, influenced by global economic uncertainty and trade tensions. As consumer confidence wanes, businesses are compelled to reassess production levels and inventory strategies, potentially leading to reduced investment and employment opportunities.
Patrick Gill, Vice President of the Business Data Lab, emphasizes the mounting challenges businesses face amid escalating trade tensions. “Supply chains are strained, tariff-driven price pressures are rising, and businesses, especially exporters, are struggling to stay afloat,” he notes. This sentiment resonates across industries, as companies navigate an unpredictable economic landscape marked by disrupted supply chains and fluctuating trade policies.
Despite these headwinds, a resilient 73% of businesses remain optimistic about the year ahead. However, the Canadian Chamber of Commerce cautions that optimism alone is insufficient to navigate the current challenges. The organization underscores the need for actionable solutions and policies that address the root causes of these issues, fostering a more stable and conducive environment for business growth.
As the voice of over 400 chambers of commerce and boards of trade, representing more than 200,000 businesses across Canada, the Canadian Chamber of Commerce continues to advocate for conditions that foster collective success. Its mission is to provide businesses with critical insights into markets, competitors, and trends, while influencing policies that drive prosperity and delivering tangible impact on business and economic performance.
Conclusion
The latest report from the Canadian Chamber of Commerce reveals a concerning decline in optimism among goods exporters, highlighting the broader economic challenges facing Canadian businesses. Once a symbol of economic resilience, goods exporters are now grappling with diminished confidence due to supply chain disruptions, trade policy uncertainty, and regional disparities.
While 73% of businesses remain optimistic about the future, the Canadian Chamber of Commerce emphasizes the need for actionable solutions to address the root causes of these challenges. Weak consumer demand, rising costs, and strained supply chains require targeted policies and strategies to foster stability and growth.
As businesses navigate this unpredictable economic landscape, the Canadian Chamber of Commerce continues to advocate for conditions that support collective success. By addressing these pressing issues, Canada can ensure a more resilient and competitive business environment in the years to come.
Frequently Asked Questions
Why are goods exporters trailing other businesses in optimism?
Goods exporters are facing challenges such as supply chain disruptions, rail and port strikes, and rising trade policy uncertainty, which have led to a decline in their confidence levels compared to other industries.
How are tariff measures impacting businesses?
New tariff measures are increasing cost pressures on businesses, forcing them to reevaluate their pricing strategies. This has reversed a trend of declining price expectations, with more businesses now anticipating raising prices to maintain profitability.
Which regions are most affected by trade disruptions?
Ontario, particularly Southwestern Ontario, is the least optimistic region due to its trade-exposed industries being heavily impacted by global economic shifts and supply chain disruptions.
What is the current state of consumer demand?
Weak consumer demand has emerged as a top concern for businesses, surpassing labor shortages for the second consecutive quarter. This reflects a broader slowdown in spending and heightened uncertainty in global trade.
How are supply chain challenges affecting businesses?
Supply chain challenges are reemerging as a major issue, with nearly 40% of goods exporters expecting conditions to worsen over the next six months. This is attributed to ongoing struggles in securing essential inputs both domestically and internationally.
