By Julie Gordon
OTTAWA, Jan 17 (Reuters) – Canadian firms see labor shortages intensifying and wage pressure increasing, with strong demand growth and supply chain constraints putting upward pressure on prices, a regular Bank of Canada survey said on Monday.
The central bank’s Business Outlook Survey Indicator reached its highest level on record in the fourth quarter, which was conducted before the Omicron coronavirus variant began spreading widely.
“The combination of strong demand and bottlenecks in supply is expected to put upward pressure on prices over the next year,” said the survey.
“In response to capacity pressures, most businesses across sectors and regions are set to increase investment and plan to raise wages to compete for workers and retain staff.”
Inflation expectations for the next two years continued to increase, with two-thirds of firms now expecting inflation to be above the central bank’s 1-3% control range over the next two years.
(Reporting by Julie Gordon, editing by David Ljunggren)