The majority of businesses in B.C. are not planning price increases in 2013, according to a BMO Bank of Montreal report released over the weekend.
The Canada-wide report states that 70% of B.C.’s businesses are planning to keep price levels the same as this year, compared with a rate of 61% nationwide. This is the highest level of all provinces surveyed.
A small percentage of businesses in B.C. (2%) expect to cut prices, while 22% forecast price increases.
The survey found businesses in Alberta the most likely to increase prices, with 38% of businesses expected to start charging more in 2013.
“Modest economic growth, the high Canadian dollar and the lure of cross-border deals have convinced many Canadian businesses not to raise prices,” said Sal Guatieri, BMO Capital Markets senior economist. “Staying competitive by cutting costs and raising productivity is the name of the game and will help Canadian businesses in the long run.”
He also explained that slower economic growth will keep price pressures contained.
“The inflation rate will likely fall from 2.9% last year to 1.6% in 2012 and stay below 2% next year, supporting the spending power of households.”
The report found that businesses expect to grow by several different strategies, with the most popular responses being:
- increased volumes;
- better use of technology;
- improved quality of management teams;
- decreased overhead costs; and
- managed or reduced debt.
The report results are based on a survey of 500 Canadian business owners conducted by Pollara Strategic Insights in August and September of this year.
