Canadian economy expected to remain sluggish in Q1 2024: CFIB forecasts

Toronto, January 23, 2024 – The Canadian economy is expected to display sluggish growth in Q1 2024, after having been more or less stuck in neutral in Q4 2023, according to the latest Main Street Quarterly report by the Canadian Federation of Independent Business (CFIB).

Key highlights

  • CFIB’s forecasts in partnership with AppEco suggest the Canadian economy contracted in Q4 2023 (-0.2%) but will rebound to 0.5% in Q1 2024.
  • Consumer Price Index (CPI) inflation, both total (3.2%) and excluding food and energy (3.4%), receded in Q4 and is expected to be stable in the first quarter of 2024. 
  • The national job vacancy rate continued to decrease, with a slight drop to 3.7% in Q4. This represents 523,000 unfilled positions.
  • Most businesses are still considering increasing prices in 2024. However, the average price hike is expected to be lower than in previous post-pandemic years at 3.1%, and fewer firms will be increasing prices than in previous years.
  • A special look at manufacturing businesses reveals their optimism over the short and long term has been declining rapidly for the past two quarters. An increasing share of manufacturers also report insufficient domestic and foreign demand.

Conclusions by CFIB’s chief economist and vice-president of research Simon Gaudreault:

  • Although the economy experienced a mild technical recession according to the forecasts and official definitions, the story is actually a bit more nuanced than that. Our analysis shows some key macro indicators (sales, employment) continue to display a certain strength, while at the same time others such as investment and optimism on Main Street (as reported in our latest monthly editions of the Business Barometer®) are weak. In any event, current forecasts point to a short-lived contraction of the overall economy, with a return to positive growth in early 2024. A real recovery for the small business sector should arrive much later given the enduring poor business environment.

  • Inflation is generally on the downward trend, but our forecasts of some of its classic measures remain just shy of the Bank of Canada’s inflation-control target range of 1 to 3%. Other measures of underlying inflation rather indicate that we are within range, and much closer to the 2% midpoint.  Given the current slowdown, the breadth of challenges facing Main Street and the delayed effects of past interest rate hikes, the Bank of Canada should seriously consider making monetary policy less restrictive as of next spring.

  • Private investment plans are at their lowest level ever, having severely dropped by 12% compared to Q3. This is mainly driven by very low long-term small business confidence. Business owners who are feeling rather pessimistic about their future due to general uncertainty, various cost pressures and tax increases weighing on them are significantly less likely to invest in their business.

Read the full Main Street Quarterly here.

For media enquiries or interviews, please contact:
Dariya Baiguzhiyeva, CFIB

About AppEco
AppEco is a consulting firm specializing in economic and strategic analysis. It possesses in-depth technical expertise and delivers first-class services in applied economics: economic impact studies, surveys and polls, cost-benefit analyses, modelling, econometrics, pricing, etc. Its mission is to provide useful services that contribute to economic growth and the success of clients' projects. AppEco works with firms of all sizes, from small to multinationals, as well as governments and non-profit organizations. Learn more at

About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 97,000 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